Basel Core Principles for Effective Banking Supervision (2024)
Principles 14 to 16: corporate governance, risk management process and capital adequacy – Basel Core Principles for Effective Banking Supervision (2024)

Basel Core Principles for Effective Banking Supervision (2024) P16: Principle 16: capital adequacy

The bank calculates and consistently observes the prescribed capital requirements, including the thresholds that trigger supervisory action, using capital components defined with emphasis on those permanently available to absorb losses as a going concern, and including on- and off-balance sheet risks; for internationally active banks the definition of capital, risk coverage, calculation method and thresholds are no less stringent than the applicable Basel standards, applied on a fully consolidated basis and at every tier of the group. The bank accepts specific capital charges or limits the supervisor imposes on material exposures (including risks not adequately transferred through securitisation) and capital requirements that vary with its risk profile. Internal risk assessments used as inputs to regulatory capital are used only with supervisory approval, meet rigorous qualifying standards, and any cessation or material change is approved. The bank takes a forward-looking approach to capital management with stress testing, sets capital levels and plans in anticipation of cycle, market and bank-specific effects, keeps feasible contingency arrangements to maintain or strengthen capital in stress, and observes a simple, transparent non-risk-based leverage measure covering all exposures.

Maintained by Gerard Blokdyk

What else in your programme already covers this

This control maps to 3 controls across 1 other frameworks. If you already hold one of them, the evidence you collected for it is the starting point here rather than new work.

  • CAP10 Include only instruments that meet the CET1, Additional Tier 1 and Tier 2 eligibility criteria
  • LEV10-30 Maintain a Tier 1 leverage ratio of at least 3% on a correctly measured exposure base
  • RBC20 Meet the minimum risk-based capital ratios at all times on RWA that respect the output floor

Every mapping shown was judged rather than inferred from wording similarity, and the ones that failed review are published too. See the coverage reports and what was rejected.

Other controls in Principles 14 to 16: corporate governance, risk management process and capital adequacy – Basel Core Principles for Effective Banking Supervision (2024)

Query this from an agent

The graph holds this control, the 3 it maps to, and the evidence behind each claim, over MCP and REST.