Regulatory Alerts2014-01-01
Instructions No. 10 of 2014 Regarding Stress Testing
The Palestine Monetary Authority issued Instructions No. 10 of 2014 to mandate comprehensive stress testing for all licensed banks in order to strengthen banking system stability and mitigate potential risks. The directive requires banks to implement robust internal policies, maintain adequate infrastructure, and conduct both single-variable and multi-variable stress tests semi-annually, covering credit, market, operational, and liquidity risks against specified political and economic shocks. Banks must submit test results, annual data, and impact assessments on Tier 1 capital ratios and short-term liquidity to the Authority within thirty days of completion or fiscal year-end, with non-compliance subject to penalties under the 2010 Banks Legislative Decree.