Document ID: chunk:federal_register_of_legislation:F2024L01518:body:0:p9
Version: federal_register_of_legislation:F2024L01518
Segment Type: other
Provision Reference: 
Character Range: 22933–26061

measures it proposes to take to address these concerns;
         3.           indication of significant adverse changes in market pricing of, or trading in, the capital instruments of the ADI or group of which it is a member (including pressures on the ADI to purchase its own capital instruments); or
         4.           other significant adverse changes in its capital, whether at Level 1 or Level 2.

Attachment A – Risk-based regulatory capital ratios
 1.              An ADI's Tier 1 Capital is the sum of its Common Equity Tier 1 Capital and Additional Tier 1 Capital. Its Total Capital is the sum of Tier 1 Capital and Tier 2 Capital. The criteria for inclusion in Common Equity Tier 1 Capital, Additional Tier 1 Capital and Tier 2 Capital are set out in APS 111.
 2.              Under APRA's risk-based capital adequacy framework, an ADI's capital adequacy is measured by means of risk-based capital ratios calculated by dividing each of its Common Equity Tier 1 Capital, Tier 1 Capital and Total Capital by its total RWA. That is:
Common Equity Tier 1 Capital ratio =  Common Equity Tier 1 Capital

Total RWA
Tier 1 Capital ratio =                Tier 1 Capital

Total RWA
Total Capital ratio =                 Total Capital

Total RWA

Total RWA are calculated in accordance with paragraph 3 or paragraph 4 of this Attachment.
 1.              Standardised ADIs must calculate total RWA as the sum of:
         1.           RWA determined in accordance with Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk (APS 112);
         2.           RWA determined in accordance with Prudential Standard APS 120 Securitisation (APS 120); and
         3.           unless APRA determines otherwise in a particular case, either:
                 1.             for non-significant financial institutions, 10 per cent of the sum of RWA calculated under sub-paragraphs 3(a) and 3(b) of this Attachment as RWA for operational risk; or
                 2.          for significant financial institutions, risk-weighted credit exposures calculated under Prudential Standard APS 180 Capital Adequacy: Counterparty Credit Risk (APS 180) and 12.5 times the sum of the capital charges determined under Prudential Standard APS 115 Capital Adequacy: Standardised Measurement Approach to Operational Risk (APS 115), Prudential Standard APS 116 Capital Adequacy: Market Risk (APS 116) and APS 180.[9]
 2.              IRB ADIs must calculate total RWA as the greater of:
         1.           the sum of:
                 1.             RWA determined in accordance with APS 112 for those asset classes where an IRB ADI is required to use the standardised approach to credit risk, or where APRA has approved partial use;
                 2.          RWA determined in accordance with Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113);
                 3.        RWA determined in accordance with APS 120;
                 4.         risk-weighted credit exposures calculated under APS 180;[10] and
                 5.           12.5 times the sum of