Capital Regulation

APRA intends to formalise regulatory support measures for banks offering Covid-19 loans through a temporary amendment to APS 220.

Financial institutions will be required to submit their first recovery plans within 18 months from the date they receive a request from BNM.

Local banks and finance companies should still exercise continued prudence in their discretionary distributions, and prioritise support to customers.

Asset managers have until 1 January 2022 to have a board-approved policy in place and ensure the availability of sufficient liquidity management tools.

The CBSL issued the directives after considering the possible adverse impact on liquidity and other KPIs of banks due to Covid-19.

The benefits of a centralised valuation engine for derivatives portfolios have become more apparent for banks amid the pandemic and as the final Basel requirements loom.

The inclusion of risk adjustments in insurance liabilities is expected to increase capital requirements for life insurers.

APRA says some requirements associated with unquestionably strong benchmarks will be revised and simplified. A quantitative impact study is being conducted.

The BCBS plans to replace the existing three-year review cycle of the assessment methodology with a process of ongoing monitoring and review.

The SPM module was revised to reflect the current supervisory approach and practices adopted by the HKMA and to incorporate international standards.