BNM Consults on Policy Framework for D-SIBs

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

• Press Release
• Exposure Draft (PDF)
• Reporting Template (XLSX)
• Reporting Instructions (PDF)

Comment Due Date: May 15, 2019

Keywords: Asia Pacific, Malaysia, Banking, Basel III, D-SIBs, Reporting, HLA, Islamic Banking, Systemic Risk, BNM