Regulatory Alerts2020-08-26 | 13259Central Bank of Lebanon Circular No. 567 Amending Key Regulatory Capital, IFRS 9, and Prudential Frameworks
The Central Bank of Lebanon issued Circular No. 567 on 26 August 2020 to temporarily amend five core regulatory circulars governing capital adequacy, IFRS 9 provisioning, prudential limits, banking facilities, and real estate liquidation. The decision mandates Lebanese banks to suspend dividend distributions for 2019 and 2020, increase Common Equity Tier 1 capital by twenty percent by December 2020, and apply flexible expected credit loss provisioning and capital buffer rules to mitigate the economic impact of the pandemic. It further introduces temporary measures allowing banks to defer customer debt downgrades, incorporate provisions into regulatory capital, and gradually rebuild conservation buffers through 2024 while supporting credit flow to productive sectors.