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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 displaced commercial risk, credit and market risk capital requirements.

      October 07

    • CA-1.1.2

      Fiduciary Risk is outlined in the IFSB Guiding Principles on Corporate Governance (Principle 2.1, Paragraphs 22 onward). Displaced Commercial Risk is defined in the IFSB Exposure Draft No4 (Paragraphs 83 onward). Both papers are available at the IFSB website (www.ifsb.org).

      October 07

    • 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.

      October 07

    • 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.
      October 07