This chapter describes the treatment of financial subsidiaries within banking groups subject to the Basel framework.

Version effective as of 15 Dec 2019

First version in the format of the consolidated framework.

Consolidation

30.1 To the greatest extent possible, all banking and other relevant financial activities ["Financial activities" do not include insurance activities and "financial entities" do not include insurance entities.] (both regulated and unregulated) conducted within a group containing an internationally active bank will be captured through consolidation. Thus, majority- owned or -controlled banking entities, securities entities (where subject to broadly similar regulation or where securities activities are deemed banking activities) and other financial entities [Examples of the types of activities that financial entities might be involved in include financial leasing, issuing credit cards, portfolio management, investment advisory, custodial and safekeeping services and other similar activities that are ancillary to the business of banking.] should generally be fully consolidated. The treatment of minority interests and other capital issued out of consolidated subsidiaries that is held by third parties is set out in CAP10.