The Bank of Thailand (BOT) published the revised Pillar 2 capital rules, along with the related questions and answers (Q&A), to help financial institutions manage risk and capital adequacy more flexibly. BOT is revising Pillar capital rules to enable financial institutions to face new types of risk, such as information technology, legal, and regulatory risks. BOT also highlighted that the rules are being revised to account for the environmental, social, and governance (ESG) factors in the risk assessment process. The revised Pillar 2 rules will come into effect on January 01, 2022.
In addition, BOT announced that the Thai financial market is now ready to use Thai Overnight Repurchase Rate (THOR) as a reference rate in financial contracts in all aspects. THOR has been developed to replace the Thai Baht Interest Rate Fixing (THBFIX) interest rate reference, which will be discontinued after June 30, 2023, along with the USD LIBOR interest rate. BOT encourages all market participants to familiarize themselves with and start using THOR as their benchmark reference rate. In another development, BOT added “TMB Bank Thanachart Public Company Limited” to the list of domestic systemically important banks (D-SIBs).
Related Links (in Thai)
- Press Release on Revised Pillar 2 Rules
- Notification on Revised Pillar 2 Rules
- Revised Pillar 2 Rules and Related Q&As (PDF)
- Press Release on THOR
- Notification on Updated List of D-SIBs
- Circular on Updates List of D-SIBs (PDF)
Effective Date: January 01, 2022
Keywords: Asia Pacific, Thailand, Banking, Securities, Pillar 2, Regulatory Capital, Basel, Interest Rate Benchmark, THOR, THBFIX, LIBOR, Benchmark Reforms, D-SIBs, Systemic Risk, BOT
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
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