Regulatory Alerts2013-01-01
Market Risk Guidelines 2013
The Reserve Bank of Malawi issued these guidelines to require all licensed banks to maintain adequate capital against market risk exposures in interest rates, equities, and foreign exchange. Banks must implement robust trading book governance, submit quarterly standardized risk reports, and calculate capital charges primarily through a mandatory Standardised Approach that applies specific and general risk weightings across defined maturity bands. The framework establishes strict eligibility criteria for trading book positions, defines precise calculation methods for long and short offsets, and ensures consistent capital allocation to cushion against price volatility.
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