Regulatory Alerts2013-05-12
Amending the controls of banks’ money market funds
In May 2013, Hesham Ramez, Chairman of the Board of Directors of the Central Bank of Egypt, wrote a letter to all banks. He mentioned that the Banking Supervisory Authority is taking measures to enhance bank safety in light of the increasing growth in banking activity and to maintain the stability of the Egyptian economy. The main amendments include: 1) Limiting the aggregate amount of funds held by liquidity-supportive banks with foreign currency deposits from 100% to a lower percentage (yet to be determined). 2) Regulating the total balance sheet size of liquidity-supportive banks and fixed deposit banks. The upper limit is set at 75% of the total bank assets, as per law no. 95 of 1992 and relevant guidelines. 3) All banks are required to comply with the prescribed capital adequacy ratios for equity investments, regardless if they are current or new clients.