143. When measuring conduct-related risk, institutions should consider (a) the uncertainty around …

When measuring conduct-related risk, institutions should consider (a) the uncertainty around provisions or expected losses originating from conduct-related events; and (b) extreme losses associated with tail risks (unexpected losses). Institutions should assess their capital needs under such events and scenarios and should also take into account the reputational effect of conduct losses. In principle, expected losses from known conduct-related issues should be covered by provisions and included in the P&L account, whereas unexpected losses are quantified and covered by capital requirements from the institution. The possible excess of amounts after projection of stressed conduct losses should be included in the institution’s assessment of potential capital needs.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

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