Regulatory Alerts2025-02-12
Added · Updated
HKMA Guidance on Interest Rate Risk Management
The Hong Kong Monetary Authority issues guidance to strengthen authorized institutions' management of interest rate risk in response to changing market conditions. Institutions must disclose capital adequacy ratios adjusted for unrealized losses on held-to-maturity debt securities when significant and implement robust behavioral model governance for measuring interest rate risk in the banking book. Senior management approval, independent validation, and annual backtesting are required for behavioral models, with prompt notification to the regulator for any new adoptions or major changes.
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