21. Additional elements that should be considered, when carrying out the determination specified in …

Additional elements that should be considered, when carrying out the determination specified in paragraph 19, where they are relevant to the characteristics of the institution, include:

• a. threats to institution’s capital position and viability stemming from a significant non-temporary increase in the cost of funding of the institution to a level which is unsustainable for the institution;
• b. the likely materialisation of the institution’s significant off-balance sheet items (i.e. contingent liabilities) in the near future, causing substantial loss threatening the institution’s capital position and viability;
• c. significant adverse developments in the macro-economic environment that could threaten the institution’s capital position and viability, including relevant developments in interest rates, real estate values or economic growth. Such developments should significantly adversely affect the business model of the institution, the outlook for its profitability, capital position and viability;
• d. significant deterioration of market perception of an institution reflected by indicators suggesting that the solvency of the institution is severely impaired and its capital position and viability threatened, as reflected in, among other things, a collapsing price-to-book level or a rapidly increasing level of the economic leverage (i.e. the economic leverage measured as the ratio of total assets to market value of equity). The development of both ratios could be compared with the institution’s peer group duly considering distortions that may arise from differences in accounting standards; or
• e. a significant non-temporary deterioration in the absolute and relative evolution of market indicators including, where available, equity-based indicators (for instance share price and book-to-market equity ratio) or debt-based indicators (for instance credit default swaps or subordinated debt spreads) indicating that an institution is likely to incur losses that could threaten its capital position and viability.

1. Przegląd

1.1 Odwołania

1.2 Zidentyfikowane wymagania

1.3 Powiązane normy

2. Zidentyfikowane wymagania

3. Powiązane normy

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