CA-1.1.1

All locally incorporated banks are required to measure and apply capital charges with respect to their credit, operational and market risks capital requirements.

CA-1.1.2

Credit risk is defined as the potential that a bank's borrower or counterparty will fail to meet its obligations in accordance with agreed terms. Credit risk exists throughout the activities of a bank in the banking book and in the trading book and includes both on- and off-balance-sheet exposures.

CA-1.1.3

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk,² but excludes strategic and reputational risk.

² Legal risk includes, but is not limited to, exposure to fines, penalties, or punitive damages resulting from supervisory actions, as well as private settlements.

CA-1.1.4

Market risk is defined as the risk of loss in on- or off-balance-sheet positions arising from movements in market prices. The risks subject to the capital requirement of this module are: