Section II. Assessment of ORC – ‘adjusted ORC’

Competent authorities should ensure that the ORC is calculated by the institutions as the range between the lowest and the highest ‘scenario-specific recovery capacity’ both in terms of capital (including leverage) and liquidity ‘relevant RP indicators’ in line with the criteria set out in paragraph 31.

Based on the assessment of the institutions’ ‘scenario-specific recovery capacity’, competent authorities should determine the ‘adjusted ORC’ of the institutions as a range both in terms of capital ‘adjusted ORC’ and liquidity ‘adjusted ORC’ and perform an overall quantitative and qualitative assessment of the ORC.

The ‘adjusted ORC’ should reflect the competent authorities’ assessment of the institutions’ ORC having considered and reviewed the relevant elements underlying its determination. Based on the outcome of this assessment, competent authorities’ ‘adjusted ORC’ should be either lower than or equal to the ORC determined by institutions.