4.1.7 Reciprocal Cross Holdings in the Capital of Banking, Financial and Insurance Entities
| No: 341000015689 | Date(g): 19/12/2012 | Date(h): 6/2/1434 | Status: In-Force |
Reciprocal cross holdings of capital that are designed to artificially inflate the capital position of banks will be deducted in full. Banks must apply a “corresponding deduction approach” to such investments in the capital of other banks, other financial institutions and insurance entities. This means the deduction should be applied to the same component of capital for which the capital would qualify if it was issued by the bank itself.