Notice of the Bank of Portugal No. 1/2009 on Own Funds and Solvency Ratio

Notices of the Bank of Portugal
Notice of the Bank of Portugal No. 1/2009
With the objective of ensuring the necessary regulatory coherence, the wording of some points of the current regulatory framework relating to own funds and the solvency ratio of institutions subject to the supervision of the Bank of Portugal is revised; The Bank of Portugal, in the exercise of the competence conferred upon it by articles 99 of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law No. 298/92, of December 31, by Decree-Law No. 104/2007 and by Decree-Law No. 103/2007, both of April 3, determines the following:

1. Paragraph 1 of point 60-A of Part 2 of Annex III to Notice of the Bank of Portugal No. 5/2007 shall have the following wording:
   «Annex III - Calculation of Minimum Own Funds Requirements according to the Standard Method
   Part 2 - Risk Weights
   ...
   60 - A The following risk weights must be applied:
   1 - Exposures to the Mutual Agricultural Credit Guarantee Fund: 20%; (...)».
2. Subparagraph h) is added to point 20 in Part 1 of Annex VI to Notice of the Bank of Portugal No. 5/2007, with the following wording:
   «Annex VI - Credit Risk Reduction
   ...
   Part 1 - Eligibility
   ...
   2 - Personal credit protection
   2.1 - Eligibility under all methods
   20 - The following entities may be recognized as eligible providers of personal credit protection:
   ... h) Mutual Agricultural Credit Guarantee Fund».
3. Point 14 of Part 2 of Annex VI to Notice of the Bank of Portugal No. 5/2007 shall have the following wording:
   «... Part 2 - Minimum Requirements
   ...
   2 - Personal credit protection and credit-linked debt securities
   2.1 - Requirements common to guarantees and credit derivatives
   14 - Without prejudice to points 16 and 16-A, guarantees and credit derivatives are only recognized if the following conditions are met:
   (...)».
4. Point 16-A is added to Part 2 of Annex VI of Notice of the Bank of Portugal No. 5/2007, with the following wording:
   «... 2. Personal credit protection and credit-linked debt securities ...
   2.2 - 1 Counter-guarantees
   ...
   2.2 - 2 Guarantees Provided by the Mutual Agricultural Credit Guarantee Fund

16-A - Guarantees provided by the Mutual Agricultural Credit Guarantee Fund comply with the conditions provided for in the legislation and regulation governing the operation of that Fund».
5. This Notice enters into force on the date of its publication.
February 17, 2009. - The Governor, Vítor Constâncio.