Regulatory Alerts2024-03-31 | CBE3.5.3Added · Updated
CBE Regulation Book 3.5.3: Interest Rate Risk Management for Non-Trading Book Positions
The Central Bank of Egypt mandates that all banks operating in Egypt, including foreign branches and banking groups, implement a standardized framework to identify, measure, and manage interest rate risk in their non-trading books. Banks are required to assess the impact of interest rate shocks on Earnings at Risk (EaR) and Economic Value of Equity (EVE), establish internal capital adequacy assessment processes (ICAAP), and adhere to strict internal control, reporting, and disclosure obligations. The regulation defines the scope of non-trading versus trading books, outlines governance responsibilities for the Board of Directors and Asset and Liability Committees, and empowers the regulator to impose corrective measures or additional capital requirements on institutions with high risk exposures.