FSC Taiwan Sets Out Provisions on Information Disclosure by Banks
FSC Taiwan published provisions on disclosure of information related to capital adequacy and risk management of domestic banks. Also published were the disclosure forms (Annex I) and questions and answers (Q&As) on the disclosure of bank capital adequacy and risk management information (Annex II). The Decree on these provisions becomes effective from June 30, 2020. In addition, FSC Taiwan published amendments to Appendix 2 of the "Instructions and Forms for the Calculation Method of Liquidity Coverage Ratio (LCR)." The amendments became effective immediately on publication. Appendix 2 details the instructions for operating deposit calculation.
Domestic banks are required to disclose relevant information on capital adequacy and risk management. Each bank shall set up a "Capital Adequacy and Risk Management Zone" on its website to disclose the qualitative and quantitative information, which shall be retained for at least one year (Disclosure Form Annex I). Qualitative information covers the scope of calculation of the consolidated capital adequacy ratio, capital adequacy management notes, capital structure tool description, and risk management overview. Qualitative information also includes explanation on the difference between accounting and statutory exposures, credit risk (including securitization), counterparty credit risk, operational risk, market risk, interest rate risk in banking book, liquidity risk, and risk management system. Quantitative information covers capital adequacy ratio and capital structure, leverage ratio, liquidity coverage ratio, net stable capital ratio, and difference between the key indicators. Banks shall disclose relevant information of the previous year by the end of March each year. Banks shall formulate a policy for disclosure of information approved by the board of directors and the policy content shall include internal control and execution procedures for disclosure of information.
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Effective Date: June 30, 2020/July 02, 2020
Keywords: Asia Pacific, Taiwan, Banking, Regulatory Capital, Disclosure, Q&A, Credit Risk, Market Risk, Operational Risk, Liquidity Risk, LCR, NSFR, Basel, FSC Taiwan
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