MAS Consults on Operational Risk and Leverage Ratio Requirements
MAS launched a consultation on the draft standards for operational risk capital and leverage ratio requirements for banks incorporated in Singapore; these standards will be covered in the MAS Notice 637 on risk-based capital adequacy requirements. Also published were the associated proposed reporting schedules for operational risk capital and leverage ratio requirements. The comment period on this consultation ends on January 21, 2021. In addition, MAS published its response to the feedback received on the May 2019 proposals on operational risk capital and leverage ratio requirements. MAS plans to consult on the draft MAS Notice 637 provisions for other areas of the Basel III reforms at a later date.
MAS seeks comments on the draft provisions of MAS Notice 637 for definitions related to operational risk capital and leverage ratio requirements (Part II), scope of application (Part III), capital adequacy ratios and leverage ratio (Part IV), credit risk (Part VII), operational risk (Part IX), and reporting schedules (Part XII). The draft provisions in MAS Notice 637 take into account final Basel III reforms published by BCBS, namely the consolidated Basel framework (published in December 2019) and the Basel framework frequently asked questions (published in June 2020). Annex B of the consultation paper contains the draft MAS Notice 637 provisions, including the reporting forms. As announced earlier, MAS will implement the revised standards for operational risk capital and leverage ratio requirements from January 01, 2023. MAS will consult on the following at a later date:
- Definition of commitments, including the exemption from the definition of commitments under a national discretion in the final Basel III reforms, which would also apply to the leverage ratio requirements. MAS will consult on the other elements of Part II for other areas of the Basel III reforms at a later date.
- Recognition of commitments, and credit conversion factors for progressive disbursal loans, which would also apply to the leverage ratio requirements. MAS will consult on certain elements of Part IV for other areas of the Basel III reforms at a later date.
Comment Due Date: January 21, 2021
Keywords: Asia Pacific, Singapore, Banking, Basel, Reporting, Operational Risk, Leverage Ratio, Regulatory Capital, MAS
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
IASB Updates IFRS Taxonomy to Reflect Benchmark Reform AmendmentsRelated Articles
US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
EBA Issues Guide on Bank Resolvability, Consults on Transferability
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets
The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.
FCA Registers Securitization Repositories; PRA Issues 2022 Priorities
The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.
EC Regulation Sets Out Methods for Measuring K-Factors Under IFR
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
BIS Studies How Platform Models Impact Financial Stability & Inclusion
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
ESAs Publish List of Financial Conglomerates for 2021
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.
APRA Licenses Two More Banks, Reduces Committed Liquidity Facility
The Australian Prudential Regulation Authority (APRA) updated the list of authorized deposit-taking institutions, granting license to Barclays Bank PLC and Crédit Agricole Corporate and Investment Bank to operate as foreign authorized deposit-taking institutions under the Banking Act 1959.
EU Issues SII Corrigendum; EIOPA Assesses SII Reporting Exemptions
EU published, in the Official Journal of the European Union, a corrigendum to the Delegated Regulation 2015/35, which supplements Solvency II Directive (2009/138/EC).
EBA Opines on Impact of De-Risking and Associated AML/CFT Challenges
The European Banking Authority (EBA) published an Opinion on the scale and impact of de-risking in European Union and the steps that competent authorities should take to tackle unwarranted de-risking.
