Supervisors will use the information provided by firms about their processes as one factor in the assessment of the adequacy of firms' overall capital levels. For instance, if a firm cannot demonstrate a strong ability to estimate capital needs, then supervisors will place less credence on the firm's own internal capital evaluation and may demand higher capital cushions, among other things.
As part of this overall approach to large institution supervision, we are creating an enhanced quantitative surveillance program for large, complex organizations that would use supervisory information, firm-specific data analysis, and market-based indicators in an effort  2  See Basel Committee on Banking Supervision (2008), Principles for Sound Liquidity Risk Management and Supervision (Basel: Basel Committee, September).