Regulatory Alerts2010-07-25
BCBS Consultative Document: Countercyclical Capital Buffer Proposal
The Saudi Arabian Monetary Agency directs all licensed banks to evaluate the July 2010 BCBS Countercyclical Capital Buffer Proposal and submit formal comments by 15 August 2010. This directive implements a dynamic capital reserve mechanism that automatically scales with economic cycles to protect the banking system against future losses. Financial institutions must integrate these buffer requirements into their capital planning to ensure adequate resilience during periods of excessive credit growth.
Banking Supervision Dept. From Tu Attention Subject $aulli %lrabian Jflonctarp %lgcncp .2.S" July 2010 Saudi Arabian Monetary Agency All Banks Managing Directors, Chief Executive Officers and General Managers BCBS Consultative Document: Countercyclical Capital Buffer Proposal The Basel Committee on Banking Supervision (BCBS) has issued a Consultative Document in July 2010 entitled "Countercyclical Capital Buffer Proposal" for consultation. The countercyclical buffer proposal would help ensure the banking system has an adequate buffer of capital to protect it against future potential losses. The said document can be accessed from the Bank for International Settlements website {http://www.bis.org). All banks are advised to review this document and provide comments thereon to the Agency by 15 August 2010. 7. ..,;.,.. ' I,_ Dr. Abdulrahman AI-Hamidy Vice Governor P. 0. Box 2992 • Riyadh 11169, Saudi Arabia - Tel.: 01-463 3000 - Telex 404390 SJ . Fax 01-466 2119