IC-1.1 IC-1.1 Overview
IC-1.1.1
A thorough and comprehensive ICAAP is a vital component of a strong risk management framework. The ICAAP should assist in determining the optimum level of capital that is needed to adequately support the nature and level of the bank's risk profile. Nevertheless, if the required economic capital determined under the requirements of this Module falls below risk based regulatory capital determined under Module CA, the latter shall be maintained.
July 2018IC-1.1.2
While the CBB recognises that increased capital is not a substitute for proper controls and risk management processes, higher regulatory capital requirements may be required to buffer banks against the higher risk of unexpected losses resulting from inadequate controls or risk management weaknesses.
July 2018IC-1.1.3
The CBB may intervene at an early stage, to prevent capital levels of banks from falling below the appropriate levels required to support the risk characteristics of the bank, and to require swift remedial action by the bank if the appropriate level of capital is not maintained or restored by the bank.
July 2018IC-1.1.4
Further to the requirements in CA-A.1.5 of Module CA, the CBB may set a target capital adequacy ratio ('CAR') for each bank, subject to its specific risk profile rating as determined, based on the CBB's supervisory risk assessment methodology.
July 2018
