ScopeScope

Scope

For the purposes of this Prudential Standard, an ADI’s banking book is comprised of the following items (banking book items):

1. all on-balance sheet items with the exception of:

2. items that are part of the ADI’s trading book. An ADI’s on-balance sheet and off-balance sheet positions may be allocated to the banking or trading books according to the ADI’s trading book policy statement (refer to Attachment A to Prudential Standard APS 116 Capital Adequacy: Market Risk (APS 116)). APS 116 provides details for the purpose of calculating capital to be held against the interest rate risk in an ADI’s trading book;

3. items that are deducted from the ADI’s Common Equity Tier 1 Capital under Prudential Standard APS 111 Capital Adequacy: Measurement of Capital (APS 111);

4. items included in the ADI’s Common Equity Tier 1 Capital (refer to APS 111); and

5. all off-balance sheet items that alter the ADI’s exposure to interest rate risk, other than positions that are part of the ADI’s trading book. This includes derivatives transacted with other entities within the group of which an ADI is a member (and not part of the ADI’s Extended Licensed Entity), for the purpose of determining interest rate risk Regulatory Capital on a Level 1 basis, or with other entities within the group of companies of which an ADI is a member that do not form part of the group, for determining such capital on a Level 2 basis.