Regulatory Alerts2020-05-25
Added · Updated
Additional measures to alleviate the impact of Covid-19
The Hong Kong Monetary Authority issues guidance to apply Basel Committee clarifications on extraordinary support measures, expected credit loss provisioning, and derivative margin requirements. The regulator expects authorized institutions to reflect the risk-reducing effects of government support in capital calculations and to exercise informed judgment in ECL estimates without automatically triggering lifetime measurements. Additionally, the HKMA defers the final implementation phases of margin requirements for non-centrally cleared OTC derivatives by one year to alleviate pandemic-related pressures.