Regulatory Alerts2020-10-22
Frequent Inquiries for a Range of Issues Related to Moving to a New Index
The Saudi Central Bank clarifies capital and counterparty credit risk treatments for financial institutions transitioning from LIBOR to a new index, confirming that contract amendments do not reset capital instrument status or extend the risk margin period beyond one year. The directive aligns domestic regulatory applications with Basel III standards and the Basel Committee’s June 2020 guidance, ensuring uninterrupted eligibility for transitional instruments. Institutions are directed to consult the Bank for International Settlements’ official FAQs for comprehensive implementation details.
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