Capital Adequacy and Measurement—The Standardized Approach

Bank of Israel
Banking Supervision Department
Policy and Regulation Division
December 1, 2019
Circular no. C-06-2596
Attn:
Banking corporations and credit card companies Re: Capital Adequacy and Measurement—The Standardized Approach (Proper Conduct of Banking Business Directive no. 203) Introduction

1. Against the background of enquiries from banks, and notice from the Basel Committee according
   to which the ESM and EFSF entities are eligible to receive a 0 percent weighting regarding capital adequacy.
2. After consultation with the Advisory Committee on Banking Business Affairs, and with the
   consent of the Governor, I have amended this Directive.
   Main Points of the Update
3. Section 56 of Directive 203:
   The ESM (European Stability Mechanism) and EFSF (European Financial Stability Facility) entities were added to the list of entities eligible to receive a risk weight of 0 percent. Explanation The update was required due to the notice from the Basel Committee on Banking Supervision dated March 18, 2014. Effective date
4. The changes to this Directive shall go into effect on the date this circular is published.
   Update of file
5. Update pages for the Proper Conduct of Banking Business Directive file are attached. Following
   are the provisions of the update:
   Remove page Insert page
   (11/18) [8] 203-1-86 (12/19) [9] 203-1-86
   Respectfully,
   Dr. Hedva Ber
   Supervisor of Banks