BCB Assesses Financial Stability Updates Basel Rule on Credit Risk
The Central Bank of Brazil (BCB) published the financial stability report and the Resolution No. 232, which amends Circular No. 3,809 and establishes procedures for recognition of mitigating instruments in the calculation of the portion of risk-weighted assets (RWA) referring to exposures to credit risk, subject to the calculation of the capital requirement using a standardized approach. This Resolution enters into force on September 01, 2022.
Additionally, BCB released the financial stability report for the second half of 2021. The report highlights that there are no relevant risks to financial stability. Capital stress tests demonstrated that the banking system was prepared to face all simulated macroeconomic shocks. The National Financial System maintained adequate provisions for the level of expected credit losses, and comfortable capitalization and liquidity. The report also provides assessments of the international financial system and financial market infrastructure, also presenting the results of the financial stability survey.
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Keywords: Americas, Brazil, Banking, Basel, Regulatory Capital, Credit Risk, Standardized Approach, Financial Stability Report, Risk Weighted Assets, BCB
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