HKMA published the list of institutions that have been designated as domestic systemically important authorized institutions, or D-SIBs, as of January 01, 2020, along with the associated Higher Loss Absorbency (HLA) requirements for these institutions. The list of authorized institutions designated as D-SIBs remains unchanged compared to the list of D-SIBs published on December 21, 2018. However, the HLA requirement for Standard Chartered Bank (Hong Kong) Limited has been increased from 1.0% to 1.5% while the HLA requirement for Hang Seng Bank Limited has been reduced from 1.5% to 1.0%.
The D-SIBs in bucket 1, which have an HLA requirement of 1%, are Bank of East Asia Limited, Hang Seng Bank Limited, and Industrial and Commercial Bank of China (Asia) Limited. The D-SIBs in bucket 2, which have an HLA requirement of 1.5%, are Bank of China (Hong Kong) Limited and Standard Chartered Bank (Hong Kong) Limited. Additionally, HSBC Limited has been included in bucket 4, with an HLA requirement of 2.5%
Under the D-SIB framework, each authorized institution that is designated as a D-SIB will be required to include a HLA requirement into the calculation of its regulatory capital buffers within a period of 12 months after formal notification of the designation. The HLA requirement applicable to a D-SIB ranges between 1.0% and 3.5% (depending on the assessed level of systemic importance of a D-SIB).
Keywords: Asia Pacific, Hong Kong, Banking, Banking Capital Rules, HLA, D-SIBs, Systemic Risk, Basel III, BCBS, HKMA
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.
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