1. The amounts of ancillary own-fund items to be taken into account when determining own funds shall be subject to prior supervisory approval.
2. The amount ascribed to each ancillary own-fund item shall reflect the loss-absorbency of the item and shall be based upon prudent and realistic assumptions. Where an ancillary own-fund item has a fixed nominal value, the amount of that item shall be equal to its nominal value, where it appropriately reflects its loss-absorbency.
3. Supervisory authorities shall approve either of the following:
(a) a monetary amount for each ancillary own-fund item;
(b) a method by which to determine the amount of each ancillary own-fund item, in which case supervisory approval of the amount determined in accordance with that method shall be granted for a specified period of time.
4. For each ancillary own-fund item, supervisory authorities shall base their approval on an assessment of the following:
(a) the status of the counterparties concerned, in relation
…