Regulatory Alerts2007-11-26
Added · Updated
Regulation (NAP) on the Adequacy of Own Funds and Solvency Ratio
The Central Bank of São Tomé and Príncipe mandates that all authorized financial institutions, including offshore banks, maintain a minimum solvency ratio of 12% by ensuring their qualified own funds consistently cover risk-weighted assets for credit, market, and operational risks. The regulation establishes precise calculation methodologies for basic and supplementary own funds, risk-weighted asset components, and reference periods, aligning domestic capital requirements with Basel Committee principles. Authorized banks currently in non-compliance must adjust their capital structures within six months, while specific exemptions apply to institutions with existing regulatory agreements for capital reconstruction.
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