126. Competent authorities should assess the appropriateness of the ICARAP’s coverage of the …

Competent authorities should assess the appropriateness of the ICARAP’s coverage of the investment firm’s business model, business lines, activities and legal entities. On the basis of this assessment, competent authorities should assess the appropriateness of the ICARAP’s identification and assessment of risks to which the investment firm is or may be exposed or pose to others, and the ICARAP’s compliance with legal requirements. In particular, they should assess:

• a. whether the ICARAP is implemented homogenously and proportionately for all the relevant investment firm’s business lines, activities and legal entities with respect to risk identification and assessment;
• b. where any entity has different internal governance arrangements or processes from the other entities of the group, whether these deviations are justified. The adoption of advanced models by only part of the group may be justified by a lack of sufficient data to estimate parameters for some business lines, activities, or legal entities, provided that these business lines, activities, or legal entities do not represent a source of risk concentration for the rest of the portfolio.

5.6.3 Investment firm’s assessment of cyclical economic fluctuations

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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