Regulatory Alerts2017-06-20 | CD-SIBOIF-1003-1-JUN20-2017Added · Updated
Norm on Reform of Article 6 of the Capital Adequacy Norm
The Superintendency of Banks and Other Financial Institutions (SIBOIF) reformed Article 6 of the Norm on Capital Adequacy to establish specific risk-weighting percentages for supervised financial institutions. The amendment assigns zero percent risk weight to assets backed by the Central Government or Central Bank of Nicaragua, twenty percent to short-term self-liquidating contingent operations, and fifty percent to certain national currency housing mortgages. It further mandates risk weights between zero and one hundred fifty percent based on long-term ratings from designated agencies for interbank and foreign sovereign exposures, while setting fixed weights of sixty to one hundred twenty-five percent for foreign currency consumer and housing credits depending on debtor income sources. The norm entered into force upon notification on June 20, 2017.