Regulatory Alerts2025-02-12
Added · Updated
Guidance on Calculation of Capital Adequacy Ratios Adjusted for Unrealised Losses on Held-to-Maturity Debt Securities
The regulator issues guidance to authorized institutions on calculating capital adequacy ratios adjusted for unrealised losses on held-to-maturity debt securities. The document specifies the mathematical formulas for deriving adjusted Common Equity Tier 1 capital, total capital, and risk-weighted assets by subtracting accumulated unrealised losses from the respective capital components. It further clarifies that hedging effects may be recognized under applicable accounting standards and mandates that these adjusted ratios be computed on a consolidated or solo basis consistent with the institution's primary capital adequacy reporting.
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