Capital Regulation

Under the RBNZ's 'very severe' stress test scenario, banks would fall below minimum regulatory capital, requiring "significant recovery responses" to avoid resolution options.

Market expectations of bank capital levels and the knowledge that capital will eventually need to be rebuilt make it difficult for banks to dip into their buffers.

The FSC has also clarified its expectations on ECL estimates under IFRS 9 and reiterated its relaxation of the D-SIB surcharge requirement.

Applicant financial institutions will no longer have to set profit targets as a condition for receiving state aid, and the 15-year repayment deadline will be scrapped.

The 'Financial Institutions Strategic Transfer Act' allows the creation of asset management companies to buy up non-performing assets from financial institutions.

FSS governor Yoon Suk-heun said financial firms should brace for a "prolonged fallout of Covid-19" and focus on boosting internal reserves and loss absorbency capacity.

The PBOC plans to further extend SME loan repayment deferrals to 31 March 2021, further drive down real interest rates, and bolster support for banks.

Exacerbated by a seven-week stock market shut down, foreign investors sold large quantities of Sri Lankan bank stocks following a ban on bank dividends this month.

The HKMA's guidance on the treatment of loans subject to government guarantees and payment moratoriums is largely in line with guidance issued by the BCBS last month.

The RBI has also increased the large exposures cap for banks from 25% to 30% and granted FPIs three more months to comply with requirements under the voluntary retention route.