Regulatory Alerts2023-10-18
Circular on Adoption of the Proportionality Framework
The Bank of Namibia issued Circular BIA 2/23 to implement a proportional regulatory framework that tailors supervisory requirements to the size, risk profile, and complexity of banking institutions. By classifying banks into Tier 1 (systemically important) and Tier 2 categories, the regulator applies a risk matrix assessing probability and impact to determine whether existing standards should be reduced or enhanced. This targeted approach adjusts capital ratios, liquidity requirements, stress testing, and disclosure rules to align regulatory burdens with each institution's specific risk exposure.
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