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  • Exempt exposures to connected counterparties

    • CM-5.6.3

      Exposures to subsidiaries which are always fully consolidated on a line-by-line basis for all supervisory purposes are exempt, however banks should bear in mind the capital adequacy requirements on a solo basis.

    • CM-5.6.4

      Exposures to unconsolidated subsidiaries are not exempt and will be included under the limits for exposures to associated companies.

    • CM-5.6.5

      In respect of exposures to other connected counterparties, the Agency will allow a bank to take on a Treasury role on behalf of the group as a whole (provided that the group is subject to consolidated supervision by its home supervisor). The Agency's policy regarding the taking on of a Treasury role includes exposures arising from a central risk management function.

    • CM-5.6.6

      In the above scenario (paragraph CM-5.6.5), for example, exposures of more than 15% of the capital base to a parent bank from a subsidiary bank may be permitted where they constitute short term lending of excess liquid funds.