40.36 Principle16: [Reference documents: BCBS, High-level considerations on proportionality, July 2022; BCBS, Guiding principles for the operationalisation of a sectoral countercyclical capital buffer, November 2019; SCO10, SCO30, CAP10, CAP30, CAP50, CAP99, RBC20, RBC30, RBC40, LEV10, LEV20, LEV30, SRP10, SRP20.] The supervisor sets prudent and appropriate capital adequacy requirements for banks that reflect the risks undertaken and presented by, a bank in the context of the markets and macroeconomic conditions in which it operates. [Implementation of the Basel Framework is not a prerequisite for compliance with the Core Principles. Compliance with the Basel Framework capital adequacy regimes is only required of those jurisdictions that have declared that they have voluntarily implemented it.] The supervisor defines the components of capital, bearing in mind their ability to absorb losses. At least for internationally active banks, capital requirements are not less stringent than the applicable Basel standards.

40.37 Essential criteria: