Featured Product

    HKMA Reduces Countercyclical Capital Buffer for Banks to 1%

    March 16, 2020

    HKMA announced that the countercyclical capital buffer (CCyB) for Hong Kong is being reduced from 2.0% to 1.0%, with immediate effect. The power to implement the CCyB in Hong Kong is provided by the Banking (Capital) Rules, which enable HKMA to announce a CCyB ratio for Hong Kong. The CCyB requirement applicable to a given authorized institution is expressed as a percentage of its common equity tier 1 capital to its total risk-weighted assets.

    In setting the CCyB ratio HKMA considered a series of quantitative indicators and qualitative information including an “indicative buffer guide.” The latest indicative buffer guide, calculated based on the 2019 fourth quarter data, signals a CCyB of 1.75%. The projection based on all available data, however, suggests that the indicative buffer guide would very likely signal a lower CCyB than this when all relevant 2020 quarter 1 data become available. CCyB is part of the Basel III regulatory capital framework. It is a mechanism to build up additional capital during periods of excessive credit growth when risks of system-wide stress are observed to be growing markedly. This capital can then be “released” when the credit cycle turns to absorb losses and enable the banking system to continue lending in the subsequent downturn.

    Keywords: Asia Pacific, Hong Kong, Banking, Basel III, CCyB, Regulatory Capital, Banking Capital Rules, CET1, HKMA

    Featured Experts
    Related Articles
    News

    APRA on Changes to Reporting Obligations for Banks Due to COVID-19

    APRA, in collaboration with the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS), published a letter outlining temporary changes in reporting obligations for authorized deposit-taking institutions and registered financial corporations, in response to COVID-19.

    April 01, 2020 WebPage Regulatory News
    News

    OSFI Outlines Capital Treatment for Some COVID-19 Mitigation Measures

    OSFI issued a letter outlining how federally regulated banks should treat the new capital made available to small and medium-size enterprises (SME) through the recently announced government programs.

    March 30, 2020 WebPage Regulatory News
    News

    APRA Announces Deferral of Capital Reform Implementation

    APRA announced that it is deferring the scheduled implementation of Basel III reforms in Australia by one year.

    March 30, 2020 WebPage Regulatory News
    News

    BaFin Explains Regulatory Measures to Address Impact of COVID-19

    BaFin has released new developments and important information about COVID-19 and its effects on the financial and banking system.

    March 30, 2020 WebPage Regulatory News
    News

    ECB Updates Recommendation on Dividend Distribution Policy of Banks

    ECB updated its recommendation to banks on dividend distributions.

    March 30, 2020 WebPage Regulatory News
    News

    EC Amends Implementing Standards on Supervisory Reporting Under CRR

    EC published Regulation 2020/429 that amends the Regulation 680/2014, which sets out implementing technical standards on supervisory reporting of institutions under the Capital Requirements Regulation or CRR (575/2013).

    March 30, 2020 WebPage Regulatory News
    News

    HKMA Announces Deferral of Implementation of Final Basel III Package

    HKMA announced its plans to defer the implementation of final Basel III package, inline with the timeline announced by the Group of Central Bank Governors and Heads of Supervision (GHOS).

    March 30, 2020 WebPage Regulatory News
    News

    BCBS Defers Implementation of Final Basel III Standards by One Year

    BCBS has announced deferral of the implementation date of the final Basel III standards by one year, to January 01, 2023.

    March 27, 2020 WebPage Regulatory News
    News

    EC Regulation on CCR Mitigation for Covered Bonds and Securitizations

    EC published the Delegated Regulation 2020/447 with regard to regulatory technical standards on the specification of criteria for establishing the arrangements to adequately mitigate counterparty credit risk, or CCR, associated with covered bonds and securitizations.

    March 27, 2020 WebPage Regulatory News
    News

    IFRS Publishes Statement on Its Work During the COVID-19 Crisis

    IFRS, in its statement, emphasized that it shares global concerns about the impact of COVID–19 and is supporting its stakeholders by reconsidering timelines of its meetings and publications, providing information on the application of IFRS 9 on financial instruments, and offering calendar updates on ongoing activities.

    March 27, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4913