BNM finalized the requirements for net stable funding ratio (NSFR) for the licensed banks, licensed investment banks, and licensed Islamic banks in Malaysia. BNM published the policy document and reporting template on NSFR, in addition to its response to the feedback received on the consultation for NSFR requirements. The policy document will come into effect on July 01, 2020. The policy document supersedes the observation period reporting obligations under the Basel III Observation Period Reporting (Net Stable Funding Ratio), which were issued on March 23, 2018.
A banking institution shall comply with the requirements in this policy document at the consolidated level and shall maintain a minimum NSFR of 100% at all times. If NSFR of a banking institution falls below the minimum level, the banking institution shall notify BNM immediately, with an explanation of the cause of the decline and remedial measures taken or to be taken (with a proposed time frame) to bring the NSFR position into compliance. BNM will consider the reasons for the decline in the NSFR as provided by the banking institution, including prevailing market conditions, before deciding on the necessity and nature of a supervisory response. A banking institution shall submit the NSFR report on a quarterly basis and shall submit the electronic copy of the reporting templates to BNM through the Statistical Mart for Analysis and Reporting (STATsmart) system no later than 30 calendar days after the quarter-end reporting date.
The NSFR is a minimum standard that requires banking institutions to maintain a stable funding profile to support their assets and off-balance sheet activities. A stable funding profile reduces the likelihood of a banking institution’s liquidity position being severely eroded by material disruptions to its regular sources of funding. Under such circumstances, the viability of the banking institution may be put, or perceived to be, at risk. This could subsequently lead to broader systemic stress. The NSFR complements the Liquidity Coverage Ratio (LCR), which has been in effect in Malaysia since June 01, 2015. While LCR encourages the short term resilience (30 days) of a banking institution’s liquidity risk profile, NSFR aims to reduce funding risk over a time horizon of up to one year.
- Policy Document (PDF)
- Reporting Template (XLSX)
- BNM Response to Feedback (PDF)
- Consultation on NSFR (PDF)
Effective Date: July 01, 2020
Keywords: Asia Pacific, Malaysia, Banking, NSFR, Basel III, Liquidity Risk, Reporting, NSFR Template, BNM
FED proposed three-year extension, without revision, of the information collection FR 4202, titled "Recordkeeping Provisions Associated with Stress Testing Guidance."
FCA updated the draft guidance for firms to ensure that mortgage customers whose homes may be repossessed are treated fairly and appropriately, particularly where there are risks of harm to customers who are vulnerable as a result of the COVID-19 pandemic.
FCA issued a statement on the cessation or loss of representativeness of the 35 LIBOR benchmark settings published by ICE Benchmark Administration or IBA.
EBA published a package that includes the final draft implementing technical standards on supervisory reporting and disclosures of investment firms.
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.