According to the Austrian Banking Act (BWG), the own funds of credit institution groups must be consolidated.
This means that the own funds of all individual institutions within the group are combined to determine the total equity capital base of the group.
The consolidated own funds are an important indicator of the financial stability of a credit institution group. They are composed of the own funds of the individual institutions and are considered at the group level. They include, among others, core capital, supplementary capital and additional capital.
The consolidation of own funds is necessary to obtain a clear overview of the actual capital resources of a credit institution group. By combining the own funds of all individual institutions, possible risks can also be better identified and assessed at the group level.
Supervisors regularly monitor the consolidated capital of a group of credit institutions to ensure that it is sufficient to absorb potential losses. The requirements for consolidated own funds may vary depending on the risk profile of the group and are set by the supervisory authorities
