Regulatory Alerts2025-02-04
Regulatory framework for measuring and controlling large exposures (LEX10–LEX40)
The Bank of Israel issued Circular No. C-06-2811 to replace Directive no. 313 with a new regulatory framework aligning Israeli banking supervision with Basel Committee standards LEX10–LEX40. The directive imposes strict limits on banking corporations' exposures to counterparties and connected groups, capping single counterparty exposure at 15 percent and group exposure at 25 percent of Tier 1 Capital. It mandates comprehensive measurement of balance sheet and off-balance sheet risks, requires look-through analysis for structured investments, and establishes a two-year transition period for compliance starting January 1, 2026.
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