BOM Issues Guideline on Cross-Border Exposure of Banks
BOM issued a guideline that sets out the minimum standards for banks in respect of their cross-border exposure. The guideline provides a risk-based management framework to mitigate the key cross-border banking risks. The guideline, developed in consultation with banks, supplements the existing guidelines in respect of the identification, measurement, management, and mitigation of credit risks. The guideline became applicable immediately on publication—that is, September 04, 2020—to banks licensed under the Banking Act 2004.
Regarding regulatory reporting, the guideline states that where a bank is affected by a material increase in underlying risks, such as credit, legal, or reputational risks, in connection with its cross-border exposure or is approached by foreign authorities regarding such matters, it shall immediately inform BOM. For transitional arrangements, banks shall fully implement the requirements of this guideline within three months from its effective date. The requirements under this guideline will not apply to fully cash collateralized cross-border exposure. However, banks are still expected to carry out a proper risk assessment before engaging in such transactions.
This guideline on cross-border exposure supplements the existing guidelines issued by BOM. These existing guidelines include the guideline on country risk management, the guideline on credit risk management, and the guideline on credit concentration risk.
Related Links
Keywords: Middle East and Africa, Mauritius, Banking, Credit Risk, Concentration Risk, Cross-Border Exposure, BOM
Related Articles
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
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.
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
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.
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
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).
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.
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.
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.
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.
