The Central Bank of the UAE (CBUAE) is extending certain measures of the Targeted Economic Support Scheme (TESS) until June 30, 2022, to support the continued economic recovery during pandemic. These measures include temporary lowering of the capital conservation buffer and the capital buffer for systemically important domestic banks as well as temporary prudential relief with respect to the liquidity coverage ratio, eligible liquid assets ratio, net stable funding ratio, and advances to stable resources ratio. The program to support new lending and financing will also continue until June 30, 2022. Additionally, CBUAE signed a memorandum of understanding with the Central Bank of Iraq to enhance co-operation in banking supervision and set out an enhanced framework to supervise bank exposures to the real estate sector. The new standards cover all types of on-balance-sheet loans and investments and all off-balance-sheet exposures to the real estate sector.
The standards on real estate exposures of banks require banks to review and improve their internal policies to enhance sound underwriting, valuation, and general risk management for their real estate exposures. They refine definitions, measurement, and supervision, facilitating the adoption of best practice in bank real estate financing and risk management. The new methodology also introduces measurement of these exposures, based on credit risk-weighted assets using the capital adequacy standards of CBUAE. Banks with higher risk-weighted real estate exposure in their portfolios will be subject to a more extensive supervisory review of their underwriting and risk management practices in this segment. The standards came into effect from December 30, 2021, starting with a one-year observation period, during which banks will be required to enhance their practices to meet the new standards. CBUAE will evaluate these standards based on a supervisory review during the observation period.
- Press Release on Pandemic Measures (PDF)
- Press Release on Real Estate Exposures (PDF)
- Press Release on MoU with Iraq (PDF)
Effective Date: December 30, 2021 (Real Estate Standards)
Keywords: Middle East and Africa, UAE, Banking, COVID-19, TESS, Regulatory Capital, Credit Risk, Liquidity Risk, Loan Repayment, Real Estate Exposures, MoU, Basel, LCR, NSFR, CBUAE
Previous ArticlePRA Fines Standard Chartered, Issues Rules on Material Risk-Takers
The European Banking Authority (EBA) published its work program for 2023 as well as the technical package for phase 3 of version 3.2 of its reporting framework.
The Board of Governors of the Federal Reserve System (FED) announced a pilot climate scenario analysis exercise for six largest banks in the U.S.
The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.
The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).
The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.
The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."
The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).