Regulatory Alerts2016-01-19
Added · Updated
Revision of Guidelines on Stress Testing for Non-Banking Financial Institutions
The Guidelines on Stress Testing for Non-Banking Financial Institutions are revised to assume only 80% of loans or leases to the top 3, 5, and 10 borrowers as defaulted under minor, moderate, and major shock scenarios, respectively. Government guarantees and hypothecation including collateral agreements for loans to specialized sectors are recognized as eligible securities on a case-by-case basis. The Weighted Insolvency Ratio rating zones are adjusted, with thresholds for Green, Yellow, Red, and other ratings shifted upward by 5 percentage points across the board. These changes take immediate effect, while other instructions within the existing guidelines remain unchanged.