Regulatory Alerts2004-01-10
C18/04: Treatment of regulatory capital - risk margin placed with licenced exchanges
The Registrar of Banks issues Circular 18/2004 to update the capital adequacy treatment of risk margins held with licensed exchanges. The regulation mandates that risk margins for exchange-traded transactions be risk-weighted at 100 percent, while those for over-the-counter transactions remain impaired against capital. This change aligns with Basel Committee discretion to prevent double-gearing of capital and reduce systemic risk within the banking system.
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