Regulatory Alerts2021-01-10
Industry Indebtedness Limitation
The Bank of Israel amended the Proper Conduct of Banking Business Directive no. 315 to update the definition of indebtedness regarding credit risk transfers. The revision requires that industry indebtedness be classified according to the activity sector of the credit protection provider when a banking corporation purchases suitable credit insurance. This change aligns regulatory treatment with capital adequacy calculations by fully recognizing the risk transfer to the insuring factor effective upon publication.
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