Featured Product

    BNM Launches Benchmark Rate, Examines Exposure to Nature-Related Risks

    The Bank Negara Malaysia (BNM) launched the Malaysia Islamic Overnight Rate (MYOR-i) and published multiple reports, including those that review the financial sector stability, set out the work done by BNM in 2021, and assess potential exposures to nature-related risks through financing activities of banks.

    BNM announced launch of MYOR-i, which will replace the Kuala Lumpur Islamic Reference Rate (KLIRR), thus leading to discontinuation of KLIRR with immediate effect. MYOR-i is the first transaction-based Islamic benchmark rate in the world and it has been developed in accordance with the Principles for Financial Benchmarks. BNM will conduct periodic reviews of MYOR-i to ensure that it remains robust and representative of conditions in the underlying market. Additionally, the financial stability review notes that stress tests affirm the ability of financial institutions to support economic recovery, as almost all financial institutions are able to maintain post-shock capital ratios above regulatory minima.  

    Another key development involves the joint exploratory study of BNM and the World Bank, which uses local and global data to examine the relationship between the Malaysian financial sector and nature. The report provides a first assessment of nature-related financial risks for the Malaysian banking sector, examining the lending exposure to businesses that depend on, and impact, nature and its ecosystem services. Findings suggest substantial differences between individual banks in their exposure to sectors that depend highly on ecosystem services and that highly impact natural assets and ecosystem services. The report notes that key areas for actions to manage nature-related financial risks include Raising awareness and policy discourse, Enhancing capacity building of relevant stakeholders, enhancing macroeconomic surveillance capacity and risk identification, and developing regulatory and supervisory requirements. The exposure analysis conducted in this report is a step towards a fully-fledged nature stress-test. BNM will continue to engage with the financial sector and other key stakeholders to build capacity in this area.

     

    Related Links

     

    Keywords: Asia Pacific, Malaysia, Banking, MYOR-i, KLIRR, Islamic Banking, Lending, Climate Change Risk, ESG, Financial Stability Review, Credit Risk, Stress Testing, Benchmark Reforms, BNM

    Featured Experts
    Related Articles
    News

    EBA Launches Stress Tests for Banks, Issues Other Updates

    The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.

    January 31, 2023 WebPage Regulatory News
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8700