March 07, 2019

BCBS published reports assessing implementation of the net stable funding ratio (NSFR) and the large exposures (LE) framework in Brazil. Overall, the NSFR and the large exposures framework in Brazil were found to be compliant with the global standards of BCBS. This is the highest of the four possible assessment grades, with each component being assessed as compliant.

Brazil implemented the NSFR as a minimum standard as of October 01, 2018. The Brazilian NSFR regulation is applicable to large or internationally active banks on a consolidated basis. The NSFR minimum requirements were implemented via a resolution and a circular issued in November and December 2017, respectively. The Assessment Team recognizes the efforts made by BCB to improve the consistency of its NSFR regulation throughout the assessment process. These amendments, notably in the areas of available stable funding (ASF), required stable funding (RSF) and disclosure requirements, became effective prior to December 31, 2018 (Annex 4 of the report contains a complete list of the amendments), which was the cut-off date for the assessment. The NSFR regulation of the Central Bank of Brazil (BCB) is super-equivalent to the Basel NSFR standard with regard to the scope of high-quality liquid assets (HQLA). The stricter rule has not been taken into account as a mitigant for the overall or component-level assessment of compliance.

Additionally, Brazil implemented the large exposures framework as a minimum standard as of January 01, 2019. The Brazilian large exposures regulation is applicable to large or internationally active banks on a consolidated basis. The large exposures framework is applied to other banks proportionally, taking into account their size and complexity. The framework was implemented via a resolution issued by the National Monetary Council in July 2018. The Assessment Team recognizes the efforts made by BCB to improve the consistency of its large exposures regulation throughout the assessment process. These amendments, notably in the area of the value of exposures, became effective prior to December 31, 2018 (Annex 3 contains a complete list of the amendments), which was the cutoff date for the assessment. The Assessment Team believes it would be helpful if the Basel Committee provides further clarification on whether a 15% or a 25% limit should be applied in cases where one global systemically important bank (G-SIB) has a single exposure to the subsidiary of another G-SIB, without having any other exposures to the G-SIB or to any other entities belonging to that G-SIB. 

These publications form part of the Regulatory Consistency Assessment Program (RCAP), through which the Basel Committee monitors the timely adoption of regulations by its members, assesses the regulations' consistency with the Basel framework, and examines the consistency of banks' calculation of the prudential ratios across jurisdictions. The Basel Committee plans to complete its review of the implementation of the NSFR and the large exposures framework for all member jurisdictions by March 2021. 

 

Related Links

Keywords: Americas, Brazil, Banking, RCAP, NSFR, Large Exposures, Basel III, BCB, BCBS


Related Articles
News

US Agencies Adopt Rule to Exclude Community Banks from Volcker Rule

US Agencies (CFTC, FDIC, FED, OCC, and SEC) adopted a final rule to exclude community banks from the Volcker Rule, in line with amendments to certain sections of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

July 22, 2019 WebPage Regulatory News
News

US Agencies Adopt Amendments to Simplify Regulatory Capital Rules

US Agencies (FDIC, FED, and OCC) adopted a final rule that reduces regulatory burden by simplifying several requirements in the regulatory capital rules for banks.

July 22, 2019 WebPage Regulatory News
News

IA of Hong Kong Delegates Inspection and Investigation Powers to HKMA

HKMA and IA of Hong Kong jointly issued a statement announcing the delegation of the inspection and investigation powers of IA to HKMA, pursuant to the statutory regulatory regime for insurance intermediaries under the Insurance Ordinance.

July 19, 2019 WebPage Regulatory News
News

FSB Extends Implementation Timeline for Policy Recommendations on SFTs

FSB announced adjustments to the implementation timelines for its recommendations on securities financing transactions (SFTs), specifically those related to the minimum haircut standards for non-centrally cleared SFTs.

July 19, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for July 2019

EBA published answers to six questions under the Single Rulebook question and answer (Q&A) tool this week.

July 19, 2019 WebPage Regulatory News
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3482