Featured Product

    SARB on Threshold for Applying Jurisdictional Reciprocity in CCyB

    August 14, 2018

    SARB issued a directive (D2/2018) on the materiality threshold in respect of exposure to a foreign jurisdiction in applying jurisdictional reciprocity in the countercyclical capital buffer calculation. The directive is applicable to all banks, controlling companies, branches of foreign institutions, eligible institutions, and auditors of banks or controlling companies.

    The directive requires banks to calculate, at least on a quarterly basis, the required CCyB by allocating exposures to the relevant jurisdictions, based on the following specified thresholds:

    • When risk-weighted assets (RWAs) related to private sector credit exposures to a foreign jurisdiction amount to 2% or more of the total RWAs relating to private sector credit exposures of the bank, then those exposures are treated as foreign exposures and are allocated to that specific foreign jurisdiction when calculating CCyB requirements.
    • When RWAs on private sector credit exposures to a foreign jurisdiction amount to less than 2% of total RWAs relating to private sector credit exposures, those exposures shall be treated as local (home jurisdiction) exposures for the calculating CCyB.
    • When aggregate amount of all RWA on private sector credit exposures to foreign jurisdictions individually amounting to less than 2% of total RWAs relating to private sector credit exposures, amount to 10% or more of the total RWAs relating to private sector credit exposures of the bank, the bank must include in its calculation the CCyB add-on in respect of the three most signification foreign jurisdiction exposures where the foreign jurisdictions have a CCyB requirement in place.

    The specified materiality thresholds shall be applied at a bank solo, consolidated bank, consolidated controlling company, and foreign entity level. In line with the BCBS document on consolidated and enhanced framework for Pillar 3 disclosure requirements dated March 2017, the methodology for geographical allocation used as well as the use of materiality thresholds must be disclosed by banks in Template CCyB1, as contained the document. Through this process, credit exposures to a private-sector entity located in any given jurisdiction will attract the same capital buffer requirement, irrespective of the location of banking providing the credit.

     

    Related Links

    Keywords: Middle East and Africa, South Africa, Banking, CCyB, Reciprocity, Credit Exposures, Disclosures, SARB

    Related Articles
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7868