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
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