Regulatory Alerts2024-07-30
Prudential Standard on Capital Measurement Basel II/III Definition of Capital and Pillar I Framework
The Eastern Caribbean Central Bank issued this standard to establish a comprehensive capital measurement framework for Licensed Financial Institutions in the ECCU under the Banking Act 2015. It defines qualifying capital components, including Common Equity Tier 1 and Additional Tier 1, while mandating minimum regulatory ratios of 8 percent for total capital adequacy, 6 percent for Tier 1, and 4.5 percent for Common Equity Tier 1 relative to risk-weighted assets. The framework further specifies standardized capital charge methodologies for credit, market, and operational risks, ensuring institutions maintain sufficient buffers to absorb losses during periods of stress.
Share