This is the consolidated view of findings. Click the Citation IDs or 'see details →' on any item for the full details for each finding.
AI tools we tested produced two contradictory but equally wrong answers on the condition governing whether Basel-regulated equity qualifies toward an FMI's LNAFE under Principle 15 KC3: one invented a KC4 liquidity test not present in KC3, and another flatly denied that KC3 contains any Basel carve-out at all.
For a Risk team at a Payment Institution that relies on the Basel carve-out to avoid holding a redundant liquid equity buffer on top of its already-regulated capital, the second error is commercially material: it would lead the team to exclude qualifying capital from the LNAFE calculation, either understating the buffer in internal MI or building an unnecessarily large separate liquid asset pool. In a PFMI-aligned supervisory review, a policy document that omits the carve-out or mis-cites the condition will be directly contradicted by the rule text a supervisor reads.
AI tools we tested recast the single six-month operating expense floor in KC3 as a 'GREATER OF' dual-track minimum requiring the FMI to also hold enough to cover potential general business losses derived from its own scenario analysis — a sizing obligation that sits in KC2, not KC3. A Risk team that imports this framing into its LNAFE policy will have a structurally overstated floor requirement and, more seriously, a policy document that cites KC3 for an obligation KC3 does not contain.
When that document is reviewed by internal audit or by a supervisor conducting a PFMI L3 assessment, the discrepancy between the cited provision and its actual text is immediately visible and requires a formal correction — triggering remediation costs and, depending on the supervising authority, a finding in the assessment report.