HKMA Revises Supervisory Policy Module on Recovery Planning of Banks
HKMA revised the Supervisory Policy Manual module (RE-1) on recovery planning, which is a statutory guideline under the Banking Ordinance. The revised module incorporates the additional guidance related to recovery planning set out in an earlier HKMA circular dated July 06, 2017 (with appropriate modifications) and reflects the latest developments in related local and international standards and practices. The revised module will take effect from the date of its issuance.
The policy module on recovery planning provides guidance to authorized institutions on the key elements of effective recovery planning and sets out the HKMA approach to, and expectations in, reviewing the recovery plans of authorized institutions. It also sets out the manner in which the powers of HKMA related to recovery planning requirements in the Banking Ordinance are to be exercised. The main objective of recovery planning is to ensure that financial institutions are well-prepared to react quickly to, and to recover from, severe stress, through their own actions.
This module draws primarily on the FSB work on recovery and resolution planning and has taken into account the new Part XIIA of the Banking Ordinance, market developments in recovery planning standards and practices, and the HKMA experiences in implementing recovery planning requirements thus far. This module should be read in conjunction with the Banking Ordinance and other relevant modules of the Supervisory Policy Manual, such as CG-1 on corporate governance, IC-1 on risk management framework, IC-5 on stress testing, and the various modules on the effective management of inherent risks of authorized institutions. In case of any discrepancy between the Banking Ordinance and this module, the Banking Ordinance prevails. The guidance set out in this module applies to all authorized institutions in a proportionate manner, having regard to their size, structure, business mix, and the systemic risks associated with their activities.
Keywords: Asia Pacific, Hong Kong, Banking, Recovery Planning, Banking Ordinance, Supervisory Policy Manual, HKMA
Previous Article
HKMA Revises Supervisory Policy Module on Capital Adequacy RegimeRelated Articles
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.
PRA Proposes Approach for Supervision of International Banks
PRA proposed (in CP2/21) an approach to supervising the UK activities of PRA-authorized banks and designated investment firms that are either headquartered outside the UK or are part of a group based outside the UK.