Measures to impose capital add-ons
Formal measures to impose capital add-ons are rarely used, and the German authorities have
generally applied moral suasion to incentivise a bank to increase its capital levels.
Nevertheless, the authorities have taken other steps to facilitate timely and consistent
supervisory intervention to address capital inadequacies in banks. In particular, a new
enhanced approach has been developed to assess an institution’s internal capital
adequacy assessment process (ICAAP).
In addition, BaFin in December 2013 implemented a
“ladder of actions” that identifies possible supervisory actions and measures that could be
taken with regard to capital inadequacies, as well as liquidity problems and organisational
deficiencies (e.g. Control weaknesses and risk management issues).
EU Forecast
euf:ba.18.j:77/nws-01