HKMA Publishes List of Systemically Important Banks in Hong Kong
HKMA published the list of institutions that have been designated as domestic systemically important authorized institutions, or D-SIBs, as of January 01, 2020, along with the associated Higher Loss Absorbency (HLA) requirements for these institutions. The list of authorized institutions designated as D-SIBs remains unchanged compared to the list of D-SIBs published on December 21, 2018. However, the HLA requirement for Standard Chartered Bank (Hong Kong) Limited has been increased from 1.0% to 1.5% while the HLA requirement for Hang Seng Bank Limited has been reduced from 1.5% to 1.0%.
The D-SIBs in bucket 1, which have an HLA requirement of 1%, are Bank of East Asia Limited, Hang Seng Bank Limited, and Industrial and Commercial Bank of China (Asia) Limited. The D-SIBs in bucket 2, which have an HLA requirement of 1.5%, are Bank of China (Hong Kong) Limited and Standard Chartered Bank (Hong Kong) Limited. Additionally, HSBC Limited has been included in bucket 4, with an HLA requirement of 2.5%
Under the D-SIB framework, each authorized institution that is designated as a D-SIB will be required to include a HLA requirement into the calculation of its regulatory capital buffers within a period of 12 months after formal notification of the designation. The HLA requirement applicable to a D-SIB ranges between 1.0% and 3.5% (depending on the assessed level of systemic importance of a D-SIB).
Keywords: Asia Pacific, Hong Kong, Banking, Banking Capital Rules, HLA, D-SIBs, Systemic Risk, Basel III, BCBS, HKMA
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
Related Articles
CBUAE Issues Regulation for Low-Risk Specialized Banks
CBUAE has issued a regulation that introduces the licensing and supervision framework for low-risk, specialized banks.
APRA Proposes Guidance to Support Prudential Standard on Remuneration
APRA is consulting on CPG 511—the draft Prudential Practice Guide on remuneration for banks, insurers, and superannuation licensees—with the comment period ending on July 23, 2021.
MAS Announces Grant Scheme to Spur Adoption of Regtech Solutions
MAS announced a new RegTech grant scheme and an enhancement of the Digital Acceleration Grant (DAG) scheme to accelerate technology adoption in the financial sector.
PRA Review Finds Most Banks Compliant with Regulatory Reporting Rules
PRA published a letter that sets out findings from the 2020 Internal Audit Review of the Collections function of a sample of non-systemic banks and building societies.
EIOPA Launches Consultation on Interbank Offered Rate Transitions
EIOPA launched a consultation on the Interbank Offered Rate (IBOR) transitions, in context of the EU Benchmarks Regulation.
EIOPA Seeks Feedback on Approach to Blockchain and Smart Contracts
EIOPA published a discussion paper on uses cases of, and the European approach to, blockchain and smart contracts in the insurance sector.
HKMA Outlines Work Priorities for 2021, Grants License to NH Bank
HKMA granted a banking license to NongHyup Bank (also NH Bank), which is incorporated in the Republic of Korea.
PRA Proposes Options for Regulatory Framework for Non-Systemic Banks
PRA published a discussion paper that explores options for developing a simpler but resilient prudential framework for banks and building societies that are neither systemically important nor internationally active.
ECB Issues Opinion on Proposal for Market Infrastructures Based on DLT
ECB published an opinion on the proposal for a regulation on the pilot regime for market infrastructures based on distributed ledger technology.
EBA Proposes Standards to Determine Risk-Weight for Immovable Property
EBA proposed regulatory technical standards that specify how to identify the appropriate risk-weights and conditions when assessing minimum loss given default (LGD) values for exposures secured by immovable property.
