Regulatory Alerts2009-02-04
South African Reserve Bank Directive 1/2009: Capital Floors for Basel II Implementation
The South African Reserve Bank issued Directive 1/2009 to establish capital floor requirements for banks implementing the Basel II framework, aiming to prevent unintended declines in required capital levels. The directive mandates that banks using internal ratings-based or advanced measurement approaches calculate a floor based on Basel I standards, applying specific percentages that phase down from 95% to 80% over a four-year transitional period. It further details the calculation methodologies, submission timelines, and scope of application for both banks and controlling companies to ensure compliance with the Banks Act and relevant regulations.
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