Examples of Pillar 2 in a sentence
The ICAAP framework has been designed to be applied consistently across the organisation to meet the Pillar 2 requirements of local regulators.
Pillar 2 requires banks to undertake a comprehensive assessment of their risks and to determine the appropriate amounts of capital to be held against these risks where other suitable mitigants are not available.
Macquarie’s Internal Capital Adequacy Assessment Process (ICAAP) addresses its requirements under Pillar 2.
Most of the Pillar 2 risks are included in GIB’s calculation of internal economic capital.
Pillar 2 defines the process of supervisory review of an institution’s risk management framework and, ultimately, its capital adequacy.Under the CBB’s Pillar 2 guidelines, each bank is to be individually assessed by the CBB and an individual minimum capital adequacy ratio is to be determined for each bank.
Pillar 2 risk types include liquidity risk, interest rate risk in the banking book, business risk and concentration risk.
These are covered either by capital, or risk management and mitigation processes under Pillar 2.
Pillar 2 (the Supervisory Review Process) of the Basel III framework requires ADIs to make their own assessments of capital adequacy in light of their risk profile and to have a strategy in place for maintaining their capital levels.
ICAAP evaluates and documents all risks and substantiates appropriate capital allocation for risks identified under Pillar 1 (i.e. Credit, Market and Operational Risk) as well as Pillar 2.
The capital adequacy ratio is calculated by dividing the regulatory capital base by the total RWAs.With the introduction of Pillar 2, the CBB will implement a minimum ratio threshold to be determined for each institution individually, as described in more detail in the Pillar 2 section of this report.