104. Competent authorities should pay particular attention to high growth rates and associated risk …

Competent authorities should pay particular attention to high growth rates and associated risk assumptions, including in relation to the applicant credit institution’s adequacy of execution and risk management capabilities, to support the achievement of the targeted projections, in accordance with the analysis carried out pursuant to paragraph 92. The assessment of the credibility of the underlying assumptions should be conducted having regard to various elements, including the overall business strategy, product pricing, the business environment, the funding strategy, risk tolerance and appetite, the existence of policies aimed at ensuring sound and prudent management, etc. With reference to the sustainability of the business model, competent authorities should gain a thorough understanding of the cost structure and the relevant indicators, for example the development of the cost to target income ratio (absolute or relative to peers) at the end of the envisaged business plan time horizon and in stressed situations.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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