CA-6.4.23

A conventional bank licensee may provide several types of facilities that can be drawn under various conditions. The same conventional bank licensee may be providing two or more of these facilities. Given the different triggers found in these facilities, it may be the case that a conventional bank licensee provides duplicative coverage to the underlying exposures. In other words, the facilities provided by a conventional bank licensee may overlap since a draw on one facility may preclude (in part) a draw under the other facility. In the case of overlapping facilities provided by the same conventional bank licensee, the conventional bank licensee does not need to hold additional capital for the overlap. Rather, it is only required to hold capital once for the position covered by the overlapping facilities (whether they are liquidity facilities or credit enhancements). Where the overlapping facilities are subject to different conversion factors, the conventional bank licensee must attribute the overlapping part to the facility with the highest conversion factor. However, if overlapping facilities are provided by different banks, each conventional bank licensee must hold capital for the maximum amount of the facility (see also Paragraph CA-6.4.6A).