In the United States, we intend to use the framework to determine whether bankers are indeed able to monitor their own risk-taking and capital positions, and we will be placing the onus on bankers to show that they are able to measure, understand, and effectively manage their consolidated risks.
It is important to remember that Pillar 1 is supposed to produce a minimum level of regulatory capital and that each institution's actual capital held will vary according to its own risk profile and business mix. Explicit assumptions are built into Pillar 1, such as the idea that portfolios are well diversified and do not contain geographic or sectoral concentrations.