48.The Central Bank will review the bank’s processes to determine that:

1. i.Minimum capital requirements chosen are comprehensive and relevant to the current operating environment and the risk profile of the bank;
2. ii.Minimum capital requirements are properly monitored and reviewed by senior management; and
3. iii.The composition of capital is appropriate for the nature and scale of the bank’s business.

49.The Central Bank will also consider the extent to which the bank has provided for unexpected events in setting its minimum capital requirements. This analysis must cover a wide range of external conditions and scenarios, and the sophistication of techniques and stress tests used must be commensurate with the bank’s activities.