Regulatory Alerts2023-01-01
Palestine Monetary Authority Circular No. 74/2023: Global Financial Developments
The Palestine Monetary Authority issued Circular No. 74/2023 to mandate all Palestinian banks to proactively monitor and mitigate risks stemming from recent global financial institution disruptions and sharp declines in financial instrument prices. The circular requires banks to continuously assess exposure levels, measure impacts on capital adequacy and profitability, and generate detailed risk reports with management recommendations. Additionally, banks must convene frequent investment and risk management committee meetings and promptly notify the regulator of any actual or potential adverse impacts on their exposures.
[Logo of the Palestine Monetary Authority]
Palestine Monetary Authority PALESTINE MONETARY AUTHORITY
Circular No. (74/2023)
To all banks operating in Palestine
Date: Thursday, March 23, 2023
Subject: Global Financial Developments
With reference to the above subject, and in light of recent events witnessed by several global financial institutions involving disruptions that affected their financial status, leading to the inability of some to continue operations, as well as a sharp decline in the prices of financial instruments for numerous companies and commodities worldwide, and to ensure the adoption of all necessary measures to mitigate the impact of these developments on the financial status of banks operating in Palestine and to avoid such risks and their repercussions, we wish to emphasize the necessity of taking the following measures:
A. Monitor developments in the status of external financial and non-financial institutions in which investments are held, and continuously assess the extent of their rising risks.
B. Measure the impact of risks associated with those institutions on the bank's exposures to them and any other related exposures, as well as on the bank's financial position, profits, and capital adequacy.
C. Prepare continuous reports on risk levels at external institutions in which investments are held and any other related exposures, particularly in the event of any negative developments affecting the investment status, and submit them along with relevant management recommendations within the bank.
D. Hold recurring meetings of the committees responsible for investment and risk management to discuss any developments or increases in risk levels, and make timely decisions regarding them.
E. Notify the Palestine Monetary Authority in the event of an actual or potential impact on the bank's exposures resulting from global financial developments, clarifying the magnitude of the impact.
Supervisory Group Palestine Monetary Authority