Regulatory Alerts2024-12-13
Added · Updated
Supplementary Guidance on the Revised Credit Risk Framework: ECAI Ratings
The Hong Kong Monetary Authority issues this guidance to regulate the nomination and use of External Credit Assessment Institution ratings under the Banking (Capital)(Amendment) Rules 2023. Authorized institutions must nominate eligible ECAIs for specific exposure portfolios, ensuring reasonable coverage and consistent application for risk-weighting while transitioning from previous classification criteria. The document further details requirements for using solicited ratings, handling implicit government support assumptions, and managing the five-year transitional period for public bank exposures.