543. Competent authorities should monitor whether the amount of own funds expected according to P2G is established and maintained by the institution over time.
544. When the institution’s own funds drop, or are likely to drop, below the level determined by P2G, the competent authority should expect the institution to notify it and prepare a revised capital plan. In its notification, the institution should explain what adverse consequences are likely to force it to do so and what actions are envisaged for the eventual restoration of compliance with P2G as part of an enhanced supervisory dialogue.
545. There are generally three situations to be considered by a competent authority in which an institution could fail to meet its P2G.
a. Where the level of own funds falls below the level of P2G (while remaining above OCR) in institution-specific or external circumstances in which risks that P2G was aimed at covering have materialised, the institution may temporarily operate below the level
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