125. When assessing the effectiveness of the ICARAP, competent authorities should assess, where …

When assessing the effectiveness of the ICARAP, competent authorities should assess, where relevant distinguishing between the ICAAP and ILAAP, whether:

• a. the investment firm considers the ICARAP and its results in the decision-making and management processes at all levels in the investment firm;
• b. the investment firm uses the ICARAP and its results in its risk, capital and liquidity management;
• c. the investment firm has policies, procedures and tools to facilitate:
• i. clear identification of the functions and/or relevant committees responsible for the different elements of the ICARAP;
• ii. capital and liquidity planning: the calculation of capital and liquidity resources on a forward-looking basis in connection with the overall strategy or significant transactions;
• iii. the allocation and monitoring of capital and liquidity resources among business lines and risk types, notably by defining risk limits for business lines, entities or individual risks that are consistent with the objective of ensuring the overall adequacy of the investment firm’s internal capital and liquidity resources;
• iv. the regular and prompt reporting of capital and liquidity adequacy to senior management and to the management body;
• v. senior management or management body awareness and actions where business strategy and/or significant individual transactions may be inconsistent with the ICAAP and available internal capital or with the ILAAP and available internal liquidity resources;
• d. whether the management body demonstrates appropriate commitment to and knowledge of the ICARAP and its outcomes; and
• e. the ICARAP is forward-looking in nature by assessing the consistency of internal capital and liquidity assets with strategic plans. Comprehensiveness of the ICARAP

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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