Regulatory Alerts2022-01-01
Instructions No. (8) of 2022 Concerning the Countercyclical Capital Buffer
The Palestine Monetary Authority issued Instructions No. (8) of 2022 mandating licensed banks to establish a countercyclical capital buffer calculated as a percentage of risk-weighted assets, initially set at 0.50% based on 2021 study results. Banks must maintain this buffer exclusively using Common Equity Tier 1 instruments, continuously monitor compliance, and submit restoration plans with timelines if shortfalls occur, while facing potential dividend restrictions for non-compliance. The directive repeals previous conflicting regulations, requires full financial disclosure starting June 2023, and sets a compliance deadline of March 31, 2023, with implementation effective immediately upon issuance.
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