Basel ii Accord Sections 35 to 39

 V. Significant investments in commercial entities
 
35. Significant minority and majority investments in commercial entities which exceed
certain materiality levels will be deducted from banks’ capital. Materiality levels will be
determined by national accounting and/or regulatory practices.
 
Materiality levels of 15% of the bank’s capital for individual significant investments in commercial entities and 60% of the bank’s capital for the aggregate of such investments, or stricter levels, will be applied. The amount to be deducted will be that portion of the investment that exceeds the materiality level.
 
36. Investments in significant minority- and majority-owned and -controlled commercial
entities below the materiality levels noted above will be risk-weighted at no lower than 100%
for banks using the standardised approach.
 
For banks using the IRB approach, the investment would be risk weighted in accordance with the methodology the Committee is developing for equities and would not be less than 100%.
 
VI. Deduction of investments pursuant to this part
 
37. Where deductions of investments are made pursuant to this part on scope of
application, the deductions will be 50% from Tier 1 and 50% from Tier 2 capital.
 
38. Goodwill relating to entities subject to a deduction approach pursuant to this part
should be deducted from Tier 1 in the same manner as goodwill relating to consolidated
subsidiaries, and the remainder of the investments should be deducted as provided for in this
part. A similar treatment of goodwill should be applied, if using an alternative group-wide
approach pursuant to paragraph 30.
 
39. The limits on Tier 2 and Tier 3 capital and on innovative Tier 1 instruments will be
based on the amount of Tier 1 capital after deduction of goodwill but before the deductions of
investments pursuant to this part on scope of application (see Annex 1 for an example how
to calculate the 15% limit for innovative Tier 1 instruments).
 
  
 

 

 

Sarbanes Oxley Training
Courses designed to provide with the knowledge and skills needed to understand and support Sarbanes-Oxley compliance.
www.sarbanes-oxley-training.com  
 
Basel ii Training
Courses designed to provide with the knowledge and skills needed to understand and support Basel ii compliance.
www.basel-ii-training.com 
 
Sarbanes Oxley Act
Sarbanes Oxley Compliance: Books, Software, Certification, Training and Resources.
www.sarbanes-oxley-act.biz 
 
Basel ii Accord
Basel ii Compliance: Books, Software, Certification, Training and Resources
http://www.basel-ii-accord.com/  
 
Compliance Training
Sarbanes Oxley, Basel ii, Data Protection Directive, Information Security Training
www.compliance-training.net