The approach of the Joint Forum was to identify measurement techniques for the assessment of capital adequacy on a group-wide basis for heterogeneous financial conglomerates rather than to promote a single technique for universal application. As indicated in the paper, the measurement techniques have been found useful by a number of supervisors in assessing group-wide capital or in evaluating the impact of certain practices on regulated entities. Supervisors should have the flexibility to utilise the techniques appropriate for the specific circumstances of the particular financial conglomerates with which they deal.

The annexes to the Capital Adequacy Principles paper describe and provide examples of the measurement techniques.

The following theoretical examples illustrate situations that can be faced by supervisors in practical applications of the techniques. The purpose of the examples is to illustrate in a numerical way situations such as those described in the text of the Capital Adequacy Principles paper. The examples cross-refer to relevant text in that paper.

Only one technique, the risk-based aggregation method, is used in examples 3, 4, 5 and 6. It should be noted that similar problems to those depicted when using that technique would arise if the other techniques were used.