BAS September 2022 Presentations

How to Assess Capital Adequacy • Dividends What Capital obligations does the bank have?

What do Capital plans look like? What Capital stressors does the bank have? If the bank needs Capital, does it have access?

• Includes augmentation, dividend, and contingency

• Does the bank perform Capital stress testing?

• From who? How much? How long to get it?

27

Impact of COVID-19

Consider the institution’s capital planning efforts.

Evaluate the institution’s capital projections and whether institution management appropriately assesses the institution’s capital needs and vulnerabilities related to the pandemic and consistent with the institution’s risks. •If an institution’s risk profile is not supported appropriately by its capital levels, examiners should determine whether management has a satisfactory plan to maintain capital adequacy and, if needed, build capital. Discuss with management the institution’s plans for ensuring capital adequacy.

Consider the institution’s regulatory capital ratios, capital planning and distribution plans, risk management practices, and whether an institution maintains a fundamentally sound financial condition.

28