| Commentary

40 Solvency

| Commentary

40 Solvency1

In order to satisfy the threshold condition relating to adequate resources2 a building society’s resources must, in the opinion of the Financial Services Authority (FSA)3, be adequate in relation to the regulated activities that it seeks to carry on, or carries on4. The FSA has made specific rules regarding capital adequacy:

  1. 40.1

        a building society must maintain adequate capital5 resources commensurate with the nature and scale of its business and the risks inherent in its business6;

  2. 40.2

        where a society has subsidiary undertakings it must also maintain capital resources commensurate with the scale and nature of the activities

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