Banking (Capital)(Amendment) Rules 2023 – Supplementary Guidance onthe Revised Credit Risk Framework

The Hong Kong Monetary Authority (HKMA) has issued supplementary guidance on the revised credit risk framework introduced by the Banking (Capital) (Amendment) Rules 2023, effective 1 January 2025. The guidance, organized into six chapters, covers topics such as ECAI ratings, the Standardized (STC) and Internal Ratings-Based (IRB) approaches, counterparty credit risk, and securitization. It consolidates industry feedback, updates prior guidance, and addresses interpretative issues. The HKMA plans to update the guidance regularly and encourages authorized institutions to seek clarification as needed. The guidance is available on the HKMA’s public and Supervisory Communication websites.

Resources: https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2024/20241213e1.pdf