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

    APRA Consults to Standardize Submission Date for Quarterly Reporting

    APRA proposed to standardize quarterly reporting due dates for authorized deposit-taking institutions. The proposed standardized due date is 35 calendar days after the last day of the reference quarter, which will create a 14-calendar-day extension for credit unions and building societies.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: First Update for November 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to two questions. The answers provide clarifications on topics related to own funds and strong customer authentication under the revised Payment Services Directive or PSD2.

    November 08, 2019 WebPage Regulatory News
    News

    FED Proposes to Extend Initial Compliance Dates Under SCCL Rule

    FED published a proposal to extend, by 18 months, the initial compliance dates for foreign banks subject to the single-counterparty credit limit (SCCL) rule.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Publishes Technical Package on Reporting Framework 2.9.1

    EBA published a new release of the reporting framework 2.9.1. This release includes validation rules, Data Point Model (DPM) data dictionary, XBRL taxonomy, and other supporting documents. Additionally, the release fixes some modeling issues on COREP Liquidity and FINREP.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Publishes Methodology and Draft Templates for Stress Tests in 2020

    EBA published a package for the 2020 EU-wide stress test exercise for banks.

    November 07, 2019 WebPage Regulatory News
    News

    EC Publishes Results of Fitness Check of Reporting Requirements in EU

    EC published results of the fitness check of supervisory reporting requirements in financial services legislation in EU.

    November 07, 2019 WebPage Regulatory News
    News

    BCBS Assesses NSFR and LE Rules in Argentina and China as Compliant

    BCBS published reports that assess the implementation of net stable funding ratio (NSFR) and large exposures, or LE, framework in Argentina and China.

    November 07, 2019 WebPage Regulatory News
    News

    FSB Publishes Summary of Plenary Meeting in Paris

    At the meeting, the Plenary reviewed vulnerabilities in the global financial system, fintech developments (including developments in the crypto-asset markets), ongoing work of FSB, and the work program for 2020.

    November 07, 2019 WebPage Regulatory News
    News

    HKMA Highlights Technology Initiatives at the Hong Kong FinTech Week

    HKMA co-organized, with InvestHK, the Hong Kong FinTech Week 2019, which was a five-day flagship fintech event that attracted thousands of attendees worldwide.

    November 06, 2019 WebPage Regulatory News
    News

    ECB Report on Fallback Provisions in Contracts Referencing EURIBOR

    ECB published a report, by private sector working group on euro risk-free rates, presenting recommendations for fallback provisions in contracts for cash products and derivative transactions referencing EURIBOR.

    November 06, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4118