Regulatory Alerts1998-10-15 | 7129Reserves for Unspecified Banking Risks
The Central Bank of Lebanon issued Basic Decision No. 7129 to mandate that Lebanese banks annually establish unspecified banking risk reserves from their net after-tax profits, integrated into core tier-one capital. The decision sets the reserve rate between 0.2% and 0.3% of an individually calculated denominator, with aggregate floors of 1.25% and 2% at the tenth and twentieth financial year ends, respectively, calculated using Basel II solvency ratios. These reserves cover annual or unforeseen losses agreed with the Banking Control Commission and are prioritized for full replenishment from subsequent years' realized profits, while repealing Decision No. 6188 and taking immediate effect.
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