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  • CA-1.1 CA-1.1 Introduction

    • CA-1.1.1

      All locally incorporated banks are required to measure and apply capital charges in respect of their fiduciary and displacement risk, credit and market risk capital requirements.

    • CA-1.1.2

      Fiduciary and displacement risk is defined as [ref IFSB].

    • CA-1.1.3

      Credit risk is defined as the potential that a bank's 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 including both on and off balance sheet exposures.

    • CA-1.1.4

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

      (a) the risks pertaining to equities in the trading book;
      (b) foreign exchange risk throughout the bank; and
      (c) commodity risk throughout the bank.