ABSTRACT
FIGURE 6.1 DEPICTS the concept of own funds. The capital, and its quality, which isbacking-up the capital requirements are important issues. The investments done by the undertaking to make this backing-up accepted is also a key issue. These issues are discussed in this chapter. Investments are based on the “prudent person principle”; see Appendix E, Section E.5. In Section 25.7 we discuss the requirements for investing in ABS, that is, repackaged loans.
