5.27 Powers of the AFSA
(1) If the AFSA considers it necessary or desirable to do so in the interest of effective supervision of a Bank, the AFSA may direct the Bank to treat a party as connected to another party.
The AFSA can set different limits and ratios
(2) Despite anything in these rules, the AFSA may, in writing, set specific limits on a Bank’s exposure to particular counterparties, groups of counterparties, industries, sectors, regions, countries or asset classes on a case-by-case basis.
(3) If a Bank has 1 or more large exposures (excluding exposures to sovereigns and central banks) or if, in the AFSA’s opinion, the Bank is exposed to a significant level of risk concentration, the AFSA may impose a higher capital ratio on the Bank.
(4) In considering whether to increase the Bank’s capital ratio, the AFSA will take into account:
- (a) whether the increased capital ratio would be consistent with the Bank’s concentration risk and large exposure policies;
- (b) the number of exposures, and the size and nature of each; and
- (c) the nature, scale and complexity of the Bank’s business and the experience of its Governing Body and senior management.
(5) The AFSA may also direct the Bank to take measures to reduce its level of risk concentration.