Knowledge Base
Explain the microprudential framework
Which ratio requires banks to hold liquid assets covering at least 100% of net cash outflows over 30 days?
The Liquidity Coverage Ratio (LCR) imposes this requirement to withstand acute liquidity crises for one month. This information is drawn from the text on liquidity ratios.
Which body of the ACPR is responsible for crisis prevention and resolution?
The Resolution Board, composed of 6 members, is specifically responsible for the prevention and resolution of banking and insurance crises. This information is drawn from the description of the ACPR's governing bodies in the text.
What is the primary role of the Single Supervisory Mechanism (SSM)?
The SSM establishes an integrated supervision of credit institutions in the eurozone with a division of responsibilities based on the significance of the institutions. This information is drawn from the text on the articulation with the SSM.
What is the primary mission of the ACPR according to Article L.612-1 of the Code monétaire et financier?
The ACPR has four main objectives: preserving financial system stability, protecting clients, insured persons, members, and beneficiaries, combating money laundering and terrorist financing, and resolving banking and insurance crises. This mission is defined in Article L.612-1 of the Code monétaire et financier.
The SREP process is conducted solely by the ACPR for all banks.
The SREP process is conducted by JSTs (Joint Supervisory Teams) for significant institutions, which include ECB agents and national supervisors. This information is drawn from the text on the SREP process.
The ECB directly supervises all eurozone banks without exception.
The ECB's Single Supervisory Mechanism (SSM) directly supervises significant institutions, but less significant institutions are supervised by the ACPR under indirect ECB oversight. This is specified in the text on the articulation with the SSM.
Categorize items by dragging them to the appropriate zones
Items to categorize:
Missions
Powers
The ACPR's missions include preserving financial stability and protecting clients, while its powers include off-site and on-site inspections, corrective measures, and sanctions. This information is drawn from the text on the ACPR's missions and powers.
CET1 Ratio
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The CET1 (Common Equity Tier 1) ratio is a capital ratio requiring a minimum of 4.5% for ordinary shares and retained earnings. It is part of the Basel III requirements, as indicated in the text on prudential rules.