Featured Product

    HKMA Keeps Countercyclical Capital Buffer at 1%

    January 28, 2021

    HKMA decided to keep the countercyclical capital buffer (CCyB) ratio for Hong Kong unchanged at 1.0%, in accordance with section 3Q(10) of the Banking (Capital) Rules (BCR). The CCyB requirement applicable to a given authorized institution is expressed as a percentage of its common equity tier 1 capital to its total risk-weighted assets (RWA). The CCyB requirement of each authorized institution may vary depending on the geographic mix of its private-sector credit exposures and the CCyB applicable in each jurisdiction where it has such exposures. The CCyB is part of the Basel III regulatory capital framework and is being implemented in parallel by Basel Committee member jurisdictions worldwide.

    To reach this decision, HKMA reviewed a range of quantitative indicators and qualitative information. This included the “indicative buffer guide” produced by the HKMA Initial Reference Calculator (IRC), which is a metric that takes
    into account conditions in local credit and property markets. The latest IRC, calculated based on data from the third quarter of 2020, signals a CCyB of 2.5%. The projection based on all available data suggests that the IRC would very likely signal a lower CCyB than this when all relevant data from the fourth quarter of  2020 become available and the IRC is expected to be volatile in the current circumstances. However, the setting of the CCyB for Hong Kong always considers a broad range of information in addition to the indicative buffer guide produced by the IRC. HKMA also reviewed a series of “Comprehensive Reference Indicators” and all relevant information available at the time of decision. The information drawn from all these sources suggests that the economic environment in Hong Kong is still subject to a high level of uncertainty at the moment. Thus, HKMA considered that it is more appropriate to keep the CCyB unchanged at 1.0% and continue to monitor the situation for a few more quarters.

     

    Keywords: Asia Pacific, Hong Kong, Banking, Regulatory Capital, CCyB, Macro-Prudential Policy, CET 1, Basel, HKMA

    Featured Experts
    Related Articles
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    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.

    January 13, 2022 WebPage Regulatory News
    News

    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).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    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.

    January 12, 2022 WebPage Regulatory News
    News

    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.

    January 12, 2022 WebPage Regulatory News
    News

    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.

    January 11, 2022 WebPage Regulatory News
    News

    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.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7868