BOT Revises Pillar 2 Capital Rules, Encourages Faster Adoption of THOR
The Bank of Thailand (BOT) published the revised Pillar 2 capital rules, along with the related questions and answers (Q&A), to help financial institutions manage risk and capital adequacy more flexibly. BOT is revising Pillar capital rules to enable financial institutions to face new types of risk, such as information technology, legal, and regulatory risks. BOT also highlighted that the rules are being revised to account for the environmental, social, and governance (ESG) factors in the risk assessment process. The revised Pillar 2 rules will come into effect on January 01, 2022.
In addition, BOT announced that the Thai financial market is now ready to use Thai Overnight Repurchase Rate (THOR) as a reference rate in financial contracts in all aspects. THOR has been developed to replace the Thai Baht Interest Rate Fixing (THBFIX) interest rate reference, which will be discontinued after June 30, 2023, along with the USD LIBOR interest rate. BOT encourages all market participants to familiarize themselves with and start using THOR as their benchmark reference rate. In another development, BOT added “TMB Bank Thanachart Public Company Limited” to the list of domestic systemically important banks (D-SIBs).
Related Links (in Thai)
- Press Release on Revised Pillar 2 Rules
- Notification on Revised Pillar 2 Rules
- Revised Pillar 2 Rules and Related Q&As (PDF)
- Press Release on THOR
- Notification on Updated List of D-SIBs
- Circular on Updates List of D-SIBs (PDF)
Effective Date: January 01, 2022
Keywords: Asia Pacific, Thailand, Banking, Securities, Pillar 2, Regulatory Capital, Basel, Interest Rate Benchmark, THOR, THBFIX, LIBOR, Benchmark Reforms, D-SIBs, Systemic Risk, BOT
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Blake Coules
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Previous Article
APRA Finalizes Prudential Standard on Remuneration PracticesRelated Articles
EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
BCBS and EBA Publish Results of Basel III Monitoring Exercise
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
PRA Updates Timeline for Final Basel III Rules, Issues Other Updates
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
US Treasury Sets Out Principles for Net-Zero Financing
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
EC Launches Survey on G7 Principles on Generative AI
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.