Regulatory Alerts2008-08-27
Guideline of Interest Rate Risk Management
The Bank of Mongolia issued this guideline to define the responsibilities of its executive bodies, the Board of Directors, the Asset and Liability Management Committee, and internal control units in implementing and monitoring interest rate risk management. The document mandates that the Asset and Liability Management Committee develop risk regulations, report on risk levels at least twice a year, and utilize specific hedging instruments, while the Internal Control Unit must conduct annual examinations. Furthermore, the guideline establishes prudential ratios limiting the compound interest rate sensitivity gap to 20 percent of capital and the duration disbalance to 30 percent of total assets' average duration.
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