HKMA Proposes Changes to Module on Supervision of Concentration Risk
HKMA issued a circular proposing revisions to the Supervisory Policy Manual module CR-L-1 on consolidated supervision of concentration risks under the Banking (Exposure Limits) Rules (BELR) Rule 6. The revisions include editorial changes to make the current policy of HKMA to require compliance with the statutory limits on a consolidated basis explicit in the text so that it is more apparent that the regulations conform to the relevant standards. This module sets out general principles governing the application of consolidated supervision of concentration risks and explains the application of these principles by HKMA.
The proposed revisions are in response to the recommendations from a BCBS-formed assessment team, which has recently reviewed local implementation of BCBS standards on large exposures. A revised version of this module is attached in the Annex to the circular for reference. Since the revisions are editorial and do not involve any change in policies, any real impact is not expected on the industry. To complete the revisions by the timeline imposed by the assessment team, HKMA will arrange to publish the revised module in the Gazette in December 2019.
Keywords: Asia Pacific, Hong Kong, Banking, Concentration Risk, BELR, Supervisory Policy Manual, Large Exposures, Credit Risk, BCBS, HKMA
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.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
FED Paper Examines Segmentation in the Commercial Real Estate MarketRelated Articles
PRA Letter Sets Out Findings on Reliability of Regulatory Reporting
PRA published a "Dear CEO" letter that sets out findings of a review on the reliability of regulatory reporting and reiterates the supervisory expectations on regulatory reporting.
APRA Connect to Go Live; APRA to Reduce Reliance on CLF
The Australian Prudential Regulation Authority (APRA) confirmed that its new data collection solution APRA Connect will go live on September 13, 2021.
FED Paper Explores Fintech Partnership Dynamics in Community Banks
The Federal Reserve System (FED) published a paper describing the landscape of partnerships between community banks and fintech companies.
FDIC Selects Four Vendors for Next Phase of Rapid Prototyping Pilot
The Federal Deposit Insurance Corporation (FDIC) has chosen four companies—Novantas Inc, Palantir Technologies Inc, PeerIQ, and S&P Global Market Intelligence LLC—to propose a pilot consisting of testing new reporting and analytical tools with a small group of FDIC-supervised institutions on a voluntary basis.
PRA Consults on Requirements to Identify Material Risk-Takers
The Prudential Regulatory Authority (PRA), via the consultation paper CP18/21, proposed changes to the applicable requirements on the identification of material risk-takers for the purposes of the remuneration regime.
ESA Report Points to Elevated Credit and Cyber Risks in Wake of Crisis
The Joint Committee of European Supervisory Authorities (ESAs) published its second 2021 joint risk assessment report for the financial sector.
IOSCO on Compliance of Credit-Sensitive Rate with Benchmark Principles
The International Organization of Securities Commissions (IOSCO) published a statement reiterating the importance of continued transition to robust alternative financial benchmarks—that is, risk-free rates—to mitigate potential risks arising from the cessation of LIBOR, including the USD LIBOR.
FED Proposes Revisions to FR Y-9 Reports
The Board of Governors of the Federal Reserve System (FED) proposed revisions and three-year extension of the FRY-9 reports on financial statements for holding companies (OMB Control Number 7100-0128).
SRB Chair Discusses Improving Resolution Framework for Mid-Size Banks
The Single Resolution Board (SRB) Chair, Elke König, published an article on improving the resolution framework for medium-size banks.
ACPR Issues Update on Reporting with Legal Entity Identifier
The French Prudential Control and Resolution Authority (ACPR) announced that the testing environment for the ACPR information system and the OneGate portal will be available to receive test reports with the Legal Entity Identifier (LEI) from September 08, 2021.
