BNM Consults on Policy Framework for D-SIBs
BNM is consulting on the policy framework for the domestic systemically important banks (D-SIBs). In addition, financial institutions are required to prepare and submit information based on the reporting template provided for the period ending December 31, 2018. Responses to the consultation, including the completed reporting template, must be submitted by May 15, 2019.
The policy framework for D-SIBs is applicable to licensed banks, licensed investment banks, licensed Islamic banks, and financial holding companies. The exposure draft (consultation paper) outlines the assessment methodology to identify D-SIBs in Malaysia, the higher loss absorbency (HLA) requirements applicable to D-SIBs, and the reporting requirements applicable to financial institutions in regard to the framework. BNM, at its discretion, may impose additional requirements and policy measures as deemed appropriate by BNM to manage risks posed by D-SIBs.
The policy framework forms part of the Basel III regulatory reforms and aims to strengthen existing policy tools to address risks posed by D-SIBs. The framework aims to address the regulatory requirements and policy measures that may be applicable to D-SIBs, the intensity of supervisory oversight by BNM, and the macro-prudential surveillance of BNM. The policy document supersedes the Domestic Systemically Important Banks Framework Survey, which was issued on October 10, 2016. This document must be read together with other relevant legal instruments and policy documents issued by BNM, particularly the following:
- Capital Adequacy Framework (Capital Components) and Capital Adequacy Framework for Islamic Banks (Capital Components)
- Capital Adequacy Framework (Basel II – Risk-Weighted Assets) and Capital Adequacy Framework for Islamic Banks (Risk-Weighted Assets)
- STATsmart Reporting Requirements on Data Submission for Reporting Entities
- Liquidity Coverage Ratio
- External Assets and Liabilities Information System (EALIS)—Submission of External Assets and Liabilities Report
- Definition of Small and Medium Enterprises
Related Links
Comment Due Date: May 15, 2019
Keywords: Asia Pacific, Malaysia, Banking, Basel III, D-SIBs, Reporting, HLA, Islamic Banking, Systemic Risk, BNM
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
CBB Issues Liquidity Coverage Ratio Report Under Part B of RulebookRelated Articles
PRA Finalizes Supervisory Approach for Non-Systemic Banks in UK
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
EBA Finalizes Standards on Methods of Prudential Consolidation
EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).
EBA Updates List of Other Systemically Important Institutions in EU
EBA updated the list of other systemically important institutions (O-SIIs) in EU.
BCBS Report Concludes Basel Risk Categories Can Capture Climate Risks
BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.
UK Authorities Welcome FSB Review of their Remuneration Regime
UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.
PRA and FCA Letter on Addressing Risks from Use of Deposit Aggregators
PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.
MFSA to Amend Banking Act and Rules in Coming Months to Transpose CRD5
MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.
EC Delegated Regulation on Specialized Lending Exposures Under CRR
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI Proposes to Enhance Assurance Expectations for Basel Returns
OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.
ECB Issues Results of Benchmarking Analysis of Recovery Plans of Banks
ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.
