Featured Product

    CBUAE Provides Guidance on Application of IFRS 9 and TESS Facility

    May 30, 2020

    CBUAE issued guidance to financial institutions on the application of International Financial Reporting Standard (IFRS) 9, post a stakeholder consultation. The guidance is intended to ensure that credit losses resulting from the consequences of COVID-19 pandemic are appropriately calculated. IFRS 9 guidance proposes practical solutions to manage the impact of economic uncertainty on the estimation of expected credit losses, while remaining compliant with IFRS 9. The guidance also aims to ensure transparency and disclosures, contributing to strengthened financial stability in the UAE.

    Additionally, CBUAE issued a notice that provides additional clarifications on deferral requests under the Targeted Economic Support Scheme (TESS) liquidity facility and aims to further facilitate implementation of the scheme, with the aim to encourage banks and finance companies to draw-down more from the TESS liquidity zero cost funding facility designated to be used by impacted private corporate customers, small and medium-size enterprises (SMEs), and individuals. Pursuant to the notice, all banks and finance companies are required to consider the specific circumstances of impacted borrowers to receive a deferral of repayment within the TESS, as options for granting deferrals include the following:

    • Deferment of principal only, or
    • Deferment of both interest/profits and principal repayment, or
    • Deferment of interest/profits only

    The notice highlighted that the most in-demand option will be for the deferment of both interest/profits and principal repayment, unless the circumstances of a borrower allow for accepting other options. CBUAE also welcomed initiatives taken by banks to support and relieve their impacted customers without drawing against the TESS program, which is available to them. In this notification, CBUAE has disclosed the list of banks that availed more than 50% of the allocated TESS liquidity facility, which aims to protect and support the impacted customers during such unprecedented times. To date, 77% has been drawn-down from the AED 50 billion liquidity facility within the Targeted Economic Support Scheme (TESS), equivalent to AED 38.5 billion of allocated funds. 

     

    Related Links

    Keywords: Middle East and Africa, UAE, Banking, Credit Risk, ECL, IFRS 9, Liquidity Risk, TESS, COVID-19, CBUAE

    Featured Experts
    Related Articles
    News

    EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0

    EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.

    April 08, 2021 WebPage Regulatory News
    News

    EBA Updates Lists of Entities for Use in Capital Calculations under SA

    EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.

    April 08, 2021 WebPage Regulatory News
    News

    MAS Amends Notice on Related Party Transactions of Banks

    MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.

    April 08, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Euro Short-Term Rate

    ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.

    April 07, 2021 WebPage Regulatory News
    News

    EBA Consults on Standards Related to FRTB-SA

    EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).

    April 07, 2021 WebPage Regulatory News
    News

    PRA Proposes Rules Related to IRB Approach for Credit Risk

    PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.

    April 07, 2021 WebPage Regulatory News
    News

    BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK

    The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks

    FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks

    OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.

    April 06, 2021 WebPage Regulatory News
    News

    EU Amends CRR and Securitization Regulation in Response to Pandemic

    To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).

    April 06, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6826