Regulatory Alerts2024-11-28
Prudential Standard No. 5 - Open Foreign Currency Positions for Commercial Banks
The Central Bank of Solomon Islands issued Prudential Standard No. 5 to establish minimum requirements for commercial banks to manage foreign currency positions and risks effectively. The standard mandates that banks limit single currency open positions to 15% and overall positions to 25% of Tier 1 capital, while requiring daily monitoring and monthly supervisory reporting. Non-compliance triggers corrective measures under the Financial Institutions Act, including cease and desist orders or management replacement.
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