HKMA published the finalized common assessment framework on green and sustainable banking in Hong Kong. The framework assesses the readiness and preparedness of an institution in addressing climate (both physical and transition) and environmental risks. HKMA intends to implement the assessment on about 50 authorized institutions based predominantly on their asset sizes and business activities. Selected authorized institutions will have 12 weeks to complete this initial round of assessment, taking into account the current COVID-19 situation.
The framework was developed with the support of a working group consisting of 22 authorized institutions. It will collect information about the stage of development with respect to climate risks and environmental risks under six key elements and 20 sub-elements:
- Governance, including board and senior management oversight and roles and responsibilities
- Corporate planning and tools, including strategic plan, business plan, financial plan, scenario analysis, and stress testing
- Risk management process, including identification, measurement, monitoring, reporting, and control and mitigation
- Business policies, products, and services, including lending and investment
- Performance and resources, including indicators, targets, staff capacity, and data collection and processing
- Disclosure and communication
These elements and sub-elements represent the major areas on which an institution would focus in addressing climate and environment-related risks and are usually found in the standards, initiatives, or recommendations of international bodies and regulators of other jurisdictions. The framework is intended to help authorized institutions formulate strategies and approaches and to inform the design of supervisory expectations and requirements under Phase II of the three-phased approach of HKMA to promote green and sustainable banking in Hong Kong.
Keywords: Asia Pacific, Hong Kong, Banking, Sustainable Finance, Climate Change Risk, ESG, Stress Testing, Disclosures, Governance, Reporting, Common Assessment Framework, HKMA
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.