Administrative Measures for Management of Capital of Commercial Banks Released by NFRA
ISSUING AUTHORITIES:
National Financial Regulatory Administration
DATE OF ISSUANCE:
November 1, 2023
EFFECTIVE DATE:
January 1, 2024
On November 1, 2023, the National Financial Regulatory Administration (NFRA) issued a notice that in order to implement the spirit of the Central Financial Work Conference and comprehensively strengthen financial supervision, it has formulated the Measures for the Management of Capital of Commercial Banks (the “Measures”), further improving the rules for capital supervision of commercial banks, promoting banks to strengthen risk management level, and enhancing the quality and efficiency of serving the real economy.
NFRA has formulated corresponding measurement rules, based on the impact of regulatory prudence, economic uncertainty, risk sensitivity, measurement effectiveness, hidden risks and other risk factors, as well as the actual situation of the domestic banking industry.
At the same time, compared with the draft for comments, these Measures have improved the following three aspects: first, combining with the risk characteristics of bank-related businesses, it further calibrates the weights of some risk exposures, and optimizes the applicable credit conversion factors for individual special off-balance-sheet businesses; second, it refines and improves the expression of rules to make it easier for banks and relevant staff to understand and implement; and third, it sets a detailed transitional period arrangement to ensure the smooth and orderly implementation of the work.
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