Asia

Topic: Banking

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Basel Committee publishes work programme and strategic priorities for 2021-22

On 16 April 2021, the Basel Committee on Banking Supervision (Basel Committee) published its work programme for 2021-22. The work programme focuses on three key themes: COVID-19 resilience and recovery. This includes ongoing monitoring and assessment of risks and vulnerabilities to the global banking system. Horizon scanning and mitigation of medium-term risks and trends. This … Continue Reading

SC-STS issues implementation guidance on SOR loans and end-September 2021 timeline for cessation of issue of SOR Derivatives and SIBOR-linked Financial Products

The SC-STS have issued the Timelines to Cease Issuance of SOR Derivatives and SIBOR-Linked Financial Products and recommended the end-September 2021 as the timeline for all banks to cease issue of SOR derivatives and SIBOR-linked cash products. The SC-STS also took the opportunity to issue guidance on dealing with the limited cases of SOR loans … Continue Reading

SIBOR discontinuation milestone dates published

Singapore’s key financial industry committees, the Association of Banks in Singapore (ABS), the Singapore Foreign Exchange Market Committee (SFEMC) and the Steering Committee for SOR & SIBOR Transition to SORA (SC-STS) (together, the Committees) have released their responses to the feedback received on the report “SIBOR Reform and the Future Landscape for SGD Interest Rate … Continue Reading

Capital treatment of securitisations of non-performing loans

On 26 November 2020, the Basel Committee on Banking Supervision published a technical amendment ‘Capital treatment of securitisations of non-performing loans’. The technical amendment closes a gap in the Basel framework by setting out prudent and risk sensitive capital requirements for non-performing loan securitisations. The Basel Committee has agreed to add the following elements to … Continue Reading

FSB highlights need for resolution preparedness

On 18 November 2020, the Financial Stability Board (FSB) published its 2020 Resolution Report. In relation to banks the report notes that global systemically important banks (G-SIBs) are estimated to already meet the final 2022 minimum external total loss absorbing capacity (TLAC) requirement. While disclosure of external TLAC levels by G-SIBs has improved over the … Continue Reading

2020 list of global systemically important banks

On 11 November 2020, the Financial Stability Board (FSB) issued a press release confirming the 2020 list of global systemically important banks (G-SIBs). The list of G-SIBs is based on end-2019 data and the updated assessment methodology published by the Basel Committee on Banking Supervision in July 2013. The overall number of G-SIBs remains 30. … Continue Reading

Basel Committee approves annual G-SIBs assessment, updates workplan to evaluate post-crisis reforms

On 25 September 2020, the Basel Committee on Banking Supervision (Basel Committee) issued a press statement following its meeting on 14, 18 and 25 September 2020 to take stock of COVID-19 risks to the global banking system and related vulnerabilities. Key points in the press statement include: The Basel Committee reiterates its previous guidance that … Continue Reading

SIBOR Reform and shift towards SORA as the main SGD interest rate benchmark

The Association of Banks in Singapore (ABS), the Singapore Foreign Exchange Market Committee (SFEMC), and the Steering Committee for SOR Transition to SORA (SC-STS) have issued a consultation report, SIBOR Reform and the Future Landscape of SGD Interest Rate Benchmarks (Report). The Report recommends the discontinuation of the SGD Singapore Interbank Offered Rate (SIBOR) in … Continue Reading

FSB and Basel Committee set out supervisory recommendations for benchmark transition

On 9 July 2020, the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (Basel Committee) issued a report on supervisory issues associated with benchmark transition. The report includes insights on remaining challenges to LIBOR transition based on surveys undertaken by the FSB, the Basel Committee and the International Association of Insurance Supervisors. … Continue Reading

Basel Committee publication: Targeted revisions to the CVA risk framework

On 8 July 2020, the Basel Committee on Banking Supervision (Basel Committee) published a paper setting out the final targeted revisions to the credit valuation adjustment (CVA) risk framework. In January 2019 the Basel Committee published the revised market risk framework. In November 2019 the Basel Committee consulted on a set of targeted final revisions … Continue Reading

HKMA publishes guidance on range of practices adopted by major banks for managing climate risks

Following the recent publication of a white paper setting out the Hong Kong Monetary Authority’s (HKMA) initial thoughts on supervisory expectations for the management of climate risks (to read our blog post on this, please click here), the HKMA has issued a circular to provide greater detail on the relevant practices adopted by major banks … Continue Reading

HKMA publishes white paper on green and sustainable banking

The Hong Kong Monetary Authority (the HKMA) has published a white paper outlining its initial views on the supervisory expectations for authorized institutions (AIs) in addressing climate-related issues. The development of the supervisory expectations forms part of the work envisaged under phase 2 of the three-phased approach introduced by the HKMA in May 2019, which … Continue Reading

HKMA revises supervisory policy manual modules CA-G-1 “Overview of Capital Adequacy Regime for Locally Incorporated Authorized Institutions” and RE-1 “Recovery Planning”

The Hong Kong Monetary Authority (HKMA) has issued, by notice in the Gazette, revised versions of the Supervisory Policy Manual (SPM) modules CA-G-1 and RE-1 as statutory guidelines under section 7(3) of the Banking Ordinance.[1] CA-G-1 “Overview of Capital Adequacy Regime for Locally Incorporated Authorized Institutions” The changes incorporated in the revised SPM module CA-G-1 … Continue Reading

HKMA publishes feedback from thematic reviews of AML and CFT control measures for remote customer on-boarding initiatives

The Hong Kong Monetary Authority (HKMA) has published a circular setting out key observations and good practices relating to anti-money laundering (AML) and counter-financing of terrorism (CFT) control measures applicable to remote customer on-boarding initiatives. The feedback is based on recent thematic reviews, engagement with authorized institutions (AIs) and technology firms in the Fintech Supervisory … Continue Reading

HKMA publishes guidance on additional measures to alleviate the impact of COVID-19

Following the deferral of the implementation of Basel III announced by the Group of Central Bank Governors and Heads of Supervision on 27 March 2020, the Basel Committee on Banking Supervision (BCBS) issued additional guidance[1] to alleviate the impact of COVID-19 on the global banking system on 3 April 2020.  In light of this, the … Continue Reading

HKMA releases common assessment framework on green and sustainable banking

In May 2019, the Hong Kong Monetary Authority (HKMA) introduced a three-phased approach to support the development of green and sustainable banking in Hong Kong. The HKMA has now released the common assessment framework under Phase 1, following feedback received from the banking industry. The common assessment framework will be used to assess the “greenness” … Continue Reading

Roundup of green and sustainable finance regulatory developments

Earlier this month, a joint statement was issued in relation to the establishment of the Green and Sustainable Finance Cross-Agency Steering Group (the Steering Group). This follows a number of recent announcements aimed at supporting the development of sustainable finance in Hong Kong and highlights that tackling climate change remains a top priority for the … Continue Reading

Revised capital rules gazetted to further enhance resilience of banking system

The Banking (Capital) (Amendment) Rules 2020 (BCAR Rules) were gazetted today (24 April 2020), bringing Hong Kong in line with the latest international standards on banking regulation issued by the Basel Committee on Banking Supervision. The BCAR Rules seek to introduce: a new method for calculating the exposure amount of counterparty credit risk arising from … Continue Reading

HKMA launches temporary US dollar liquidity facility

The Hong Kong Monetary Authority (HKMA) has launched a temporary liquidity facility under which US$10 billion will be made available (the Facility) to assist licensed banks with US dollar liquidity.  The Facility will comprise of funds obtained through the US Federal Reserve’s FIMA Repo Facility (see our previous blog post here). US dollar liquidity will … Continue Reading

SFC reminds management companies and market makers of SFC-authorized ETFs of their regulatory obligations

The Securities and Futures Commission (SFC) has issued a circular reminding management companies and market makers[1] of SFC-authorized exchange traded funds[2] (ETFs) of their regulatory obligations. The SFC has expressed concerns that management companies and market makers of ETFs may not be sufficiently prepared to respond to operational disruptions caused by COVID-19, following an incident … Continue Reading

HKMA lowers regulatory reserve requirement for locally incorporated AIs amid Covid-19

Following earlier announcements, the Hong Kong Monetary Authority (HKMA) has issued a circular confirming that, with immediate effect, the regulatory reserve[1] requirement for locally incorporated authorized institutions (AIs) will be reduced by 50%.  The reserves released by this move will provide AIs with additional lending capacity to support customers impacted by COVID-19.  Reserves released should … Continue Reading

HKMA introduces liquidity measures to assist banking industry in response to COVID-19 outbreak

To ensure the continued smooth operation of the interbank market given current economic conditions, the Hong Kong Monetary Authority (HKMA) has rolled out measures to assist the banking industry in managing liquidity. In its recent circular setting out such measures, the HKMA has noted occasional tightness in the Hong Kong dollar money market, caused principally … Continue Reading

Deferral of Basel III implementation and HKMA’s supervisory actions in response to COVID-19

The Hong Kong Monetary Authority (HKMA) has issued a circular announcing that it will defer the implementation of the Basel III final reform package,[1] in line with the revised timeline announced by the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision (BCBS). The … Continue Reading

HKMA issues guidance to registered institutions on regulatory expectations following circulars published by the SFC

The Hong Kong Monetary Authority (the HKMA) has issued a circular to registered institutions (RIs) drawing their attention to the circulars recently published by the Securities and Futures Commission (the SFC), namely: (i) circular on extended deadlines for implementation of regulatory expectations and reminder of order recording requirements under COVID-19 pandemic (the Order Recording Circular) … Continue Reading
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