February 09, 2018

The Central Bank of Brazil issued a consultation (Notice 59/2018) on a resolution that improves the rules applicable to maximum exposure limits per customer and the maximum limit of concentrated exposures within the scope of the National Financial System. Notice 59/2018 incorporates recommendations from the supervisory framework for measuring and controlling large exposures, which BCBS published in 2014. Comments are invited by March 20, 2018. The new rule is expected to take effect on January 01, 2019, in line the BCBS recommendation.

In case of institutions included in Segment 1, Segment 2, Segment 3, or Segment 4, the proposal states the new individual limit of 25% of Level I of the referential equity for the total exposures to the same client and the limit of 600% of Level I of referential equity for the total of concentrated exposures. An exposure to the same customer is considered concentrated if its value is equal to or greater than 10% of Level I of the referential equity. For  institutions that are included in Segment 5, that is, institutions with a simplified risk profile, the proposal establishes the Total Simplified Reference Equity as the basis for calculating the limits and establishes less complex criteria for their calculation. The new rule also establishes criteria for measurement of exposures, definition of connected counterparties, recognition of credit risk mitigators, and reporting compliance with limits.


Related Links

Comment Due Date: March 20, 2018

Effective Date: January 01, 2019

Keywords: Americas, Brazil, Banking, Large Exposures, Exposure Limits, Concentrated Exposures, Central Bank of Brazil, Proportionality

Related Articles
News

FSB Chair Reports to G20 on Implementation of Financial Reforms

FSB published the letter to G20 Leaders and the opening statement from an FSB briefing by the FSB Chair Randal K. Quarles.

June 25, 2019 WebPage Regulatory News
News

FSB Summarizes Progress in Implementation of G20 Regulatory Reforms

FSB published a summary progress report on implementation of the G20 financial regulatory reforms.

June 25, 2019 WebPage Regulatory News
News

EBA Issues 2020 Stress Test Methodology and Templates for Discussion

EBA published the 2020 EU-wide stress test draft methodology, templates, and template guidance, for discussion with the industry.

June 25, 2019 WebPage Regulatory News
News

SRB Updates MREL Policy to Reflect Changes in CRR 2

SRB updated its policy on minimum requirement for own funds and eligible liabilities (MREL) as a result of the revisions in the recent Banking Package.

June 25, 2019 WebPage Regulatory News
News

OSFI Updates Manual of Reporting Forms and Instructions for Insurers

OSFI issued its annual update for 2019 to the manual of financial reporting forms and instructions for property and casualty (P&C) insurance companies.

June 25, 2019 WebPage Regulatory News
News

PRA Consults on PRA110 Reporting Frequency Threshold

PRA proposed (CP14/19) to amend the reporting frequency of PRA110 reporting template (PRA110) when a firm is in stress.

June 25, 2019 WebPage Regulatory News
News

APRA Updates Guidance on Managing Information Security Risks

APRA released an updated Prudential Practice Guide CPG 234 on managing information security risks, including cyber-crime.

June 25, 2019 WebPage Regulatory News
News

IMF Releases Report on 2019 Article IV Consultation with United States

IMF published its staff report in the context of the 2019 Article IV consultation with the United States.

June 24, 2019 WebPage Regulatory News
News

FCA and US Agencies on Addressing Issues in Credit Derivatives Market

U.S. SEC Chairman Jay Clayton, U.S. CFTC Chairman J. Christopher Giancarlo, and UK FCA Chief Executive Andrew Bailey issued a joint statement announcing plans to address concerns regarding opportunistic strategies in the credit derivatives markets.

June 24, 2019 WebPage Regulatory News
News

BIS Report Discusses Regulatory Issues Related to Big Techs in Finance

BIS has pre-released a chapter of the BIS Annual Economic Report; this chapter focuses on the risks and opportunities presented by large technology firms in the financial services sector.

June 23, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3315