Basel Committee Final Elements on Regulatory Capital Reform and Loss Absorbency at the Point of Non-Viability

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B,�nking Supervision Dept. l l
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Subject
\s February 2011 i�64Lf /Bos-: o 1,,
Saudi Arabian Monetary Agency
All Banks
Managing Directors, Chief Executive Officers and General Managers Basel Committee - Final Elements of the Reform to Raise the Quality of Regulatory Capital - Loss Absorbency at the Point of Non-Viability The Basel Committee on 13 January 2011 has issued a Press Release accompanied by the minimum requirements to ensure that all classes of capital instruments fully absorb losses at the point of non-viability before tax payers are exposed to losses. The Committee is proposing that in order for an instrument issued by a bank to be included in additional (i.e. non-common) tier-1 or tier-2 capital, it must meet or exceed minimum requirements set out in Annex 1 to the Basie Press Release dated 13 January 2011. These requirements are in addition to the criteria detailed iri the Basel Ill capital rules that were published in December 2010. All Banks in Saudi Arabia are required to be familiar with these minimum requirements and shouid take these into consideration when planning to issue any additional tier-·1 or tier-2 capital instruments. These rules go into immediate effect from the date of this Circular. You may access the minimum requirements and the Press Release dated 13 January 2011 from Bank for International Settlements (BIS) website address: (http://www.bis.org). »I S C\ .. c0' 7-3- 14-32. Dr. Abdulrahman Al Kalaf Deputy Governor for Technical Affairs I P. 0. Box 2992 - Riyadh 11169, Saudi Arabia - Tel.: 01-463 3000 - Telex 404390 SJ - Fax 01-466 2119 1 '""/ j l