Regulatory Alerts2023-12-15
Added · Updated
Lessons drawn on the Banking Turmoil in the US and Europe
The Hong Kong Monetary Authority issued this circular to outline supervisory expectations for authorized institutions regarding risk management lessons from the March 2023 US and European banking turmoil. The regulator requires banks to strengthen risk governance frameworks and proactively manage interest rate risk in the banking book, including the calibration of behavioral models and transparency around held-to-maturity debt securities. Additionally, institutions must enhance liquidity risk controls by addressing deposit concentration, testing contingency funding plans, and monitoring digital and social media impacts on market sentiment.
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