Regulatory Alerts2013-06-05 | CD-SIBOIF-777-1-ABR17-2013Added · Updated
Norm Amending Article 4 of the Capital Adequacy Standard
The Board of Directors of the Superintendence of Banks and Other Financial Institutions amended Article 4 of the Capital Adequacy Standard to define the components of secondary capital for national banking entities. The revised article specifies eligibility criteria for donations, equity reserves, hybrid instruments, and subordinated debt, including a 50% cap on subordinated debt relative to primary capital and a phased reduction in recognized value during the final five years before maturity. It also establishes that generic provisions for unidentified losses cannot exceed 1.25% of total credit risk-weighted assets and mandates specific clauses in contracts to allow the Superintendent to suspend interest payments during preventive measures. This norm entered into force upon its publication in the Official Gazette, La Gaceta.