408. Following the above assessment, competent authorities should form a view on whether existing own funds resources provide sound coverage of the risks to which the institution is or might be exposed. This view should be reflected in a summary of findings, accompanied by a viability score based on the considerations specified in Table 8.
Table 8 - Supervisory considerations for assigning a score to capital adequacy
|
Score |
Supervisory view |
Considerations |
|---|---|---|
|
1 |
The quantity and composition of own funds held pose a low level of risk to the viability of the institution. |
• The institution is able to comfortably meet its P2G. • The institution holds a level of own funds comfortably above its OCR and is expected to do so in the future. • Stress testing does not reveal any discernible risk regarding the impact of a severe but plausible economic downturn on own funds. • The free flow of capital between entities in the group, where relevant, is not impeded, or all entities a |