342. Competent authorities should determine through the SREP capital assessment whether the own funds held by the institution provide sound coverage of risks to capital to which the institution is or might be exposed, if such risks are assessed as material to the institution.
343. Competent authorities should do this by determining and setting the quantity (amount) and composition (quality) of additional own funds the institution is required to hold to cover elements of risks and risks not covered by Article 1 of Regulation (EU) 575/2013 ('additional own funds requirements'), including, where necessary, own funds requirements to cover the risk posed by model, control, governance or other deficiencies.
344. To address potential capital inadequacies in stressed conditions, competent authorities should take appropriate supervisory measures, including, where relevant, establishing and communicating P2G which is the quantity (amount) and quality (composition) of own funds that the instituti
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