HKMA issued a circular proposing revisions to the Supervisory Policy Manual module CR-L-1 on consolidated supervision of concentration risks under the Banking (Exposure Limits) Rules (BELR) Rule 6. The revisions include editorial changes to make the current policy of HKMA to require compliance with the statutory limits on a consolidated basis explicit in the text so that it is more apparent that the regulations conform to the relevant standards. This module sets out general principles governing the application of consolidated supervision of concentration risks and explains the application of these principles by HKMA.
The proposed revisions are in response to the recommendations from a BCBS-formed assessment team, which has recently reviewed local implementation of BCBS standards on large exposures. A revised version of this module is attached in the Annex to the circular for reference. Since the revisions are editorial and do not involve any change in policies, any real impact is not expected on the industry. To complete the revisions by the timeline imposed by the assessment team, HKMA will arrange to publish the revised module in the Gazette in December 2019.
Keywords: Asia Pacific, Hong Kong, Banking, Concentration Risk, BELR, Supervisory Policy Manual, Large Exposures, Credit Risk, BCBS, HKMA
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED released hypothetical scenarios for a second round of stress tests for banks.
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.
FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).
EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.