Featured Product

    HKMA Announces CCyB Requirement for Hong Kong Remains at 2.5%

    July 09, 2019

    HKMA decided to maintain the countercyclical capital buffer (CCyB) for banks in Hong Kong at 2.5%, in accordance with the Banking (Capital) Rules (BCR). A review of the indicators of robustness of the system showed that system-wide risks in Hong Kong that are associated with a period of excessive credit growth have not subsided. Housing affordability remains highly stretched and household debt-to-GDP ratio has risen to a new high. Therefore, it is considered appropriate to maintain the CCyB at 2.5% at this juncture, providing additional buffer to shock should systemic risks crystallize.

    In reaching the decision to maintain the Hong Kong jurisdictional CCyB rate at 2.5%, HKMA reviewed a range of quantitative indicators and qualitative information. This included the “indicative buffer guide” produced by HKMA’s Initial Reference Calculator (IRC), which is a metric that takes into account conditions in local credit and property markets. By mapping deviations (gaps) of the ratios of credit to GDP and of residential property prices to rentals from their respective long-term trends to the Basel III CCyB range of 0% to 2.5%, the IRC produces a consistent starting point for further analysis. In considering whether there is a build-up of systemic risk, HKMA 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” designed to provide an aggregate view of local conditions, including the build-up of systemic risk (such as measures of bank, household, and corporate leverage; profitability and funding conditions in the banking sector; borrowers’ debt servicing ability; and macroeconomic indicators). 

     

    Keywords: Asia Pacific, Hong Kong, Banking, CCyB, Basel III, Banking Capital Rules, Systemic Risk, Macro-Prudential Policy, HKMA

    Featured Experts
    Related Articles
    News

    BIS and Central Banks Experiment with GenAI to Assess Climate Risks

    A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe

    March 20, 2024 WebPage Regulatory News
    News

    Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures

    Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.

    March 18, 2024 WebPage Regulatory News
    News

    Singapore to Mandate Climate Disclosures from FY2025

    Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies

    March 18, 2024 WebPage Regulatory News
    News

    SEC Finalizes Climate-Related Disclosures Rule

    The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.

    March 07, 2024 WebPage Regulatory News
    News

    EBA Proposes Standards Related to Standardized Credit Risk Approach

    The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU

    March 05, 2024 WebPage Regulatory News
    News

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News
    News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News
    News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    RESULTS 1 - 10 OF 8957