Regulatory Alerts2019-02-26
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Circular No. 42 issued on February 26, 2019 regarding instructions for implementing the International Financial Reporting Standard (9)
The Central Bank of Egypt mandates that banks apply IFRS 9 starting January 1, 2019, requiring the recognition of Expected Credit Losses (ECL) and the establishment of specific governance structures, including a dedicated ECL modeling team and validation functions. Banks must classify financial assets based on business models and cash flow characteristics, reclassify instruments upon initial application, and adjust capital calculations by excluding specific provisions from Tier 2 capital. The circular also prescribes disclosure requirements, internal control assessments, and the treatment of provisions against general risk reserves.
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