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BCBS FAQs on supervisory framework for measuring and controlling large exposures
Practical Law UK Legal Update w-003-6578 (Approx. 3 pages)
BCBS FAQs on supervisory framework for measuring and controlling large exposures
| Published on 28 Sep 2016 • International |
The Basel Committee on Banking Supervision (BCBS) has issued FAQs on the supervisory framework for measuring and controlling large exposures.
On 28 September 2016, the Basel Committee on Banking Supervision (BCBS) issued frequently asked questions (FAQs) on the supervisory framework for measuring and controlling large exposures (BCBS384).
When the BCBS issued the revised supervisory framework for measuring and controlling large exposures in April 2014 (BCBS283), it noted that, by 2016, it would review the appropriateness of setting a large exposure limit for exposures to qualifying central counterparties (QCCPs) related to clearing activities. It also noted that the review would cover the impact of the large exposures framework on interbank exposures, to ensure there are no unavoidable adverse consequences for implementation of monetary policy.
The BCBS has completed the review and has decided to maintain the previously-announced treatment for both types of exposure. As a result, the framework, which will take effect from 1 January 2019, will:
- Exempt exposures to QCCPs related to central clearing from the large exposure limit.
- Apply the large exposure limit to interbank exposures (that is, no exemption will apply).
The BCBS explains that these two elements, and responses to questions it is frequently asked on the large exposures framework, are set out in the FAQs.
For more information on the BCBS' work relating to large exposures, see Practice note, BCBS standards and guidelines: Large exposures.