Designation of Domestic Systemically Important Authorized Institutions

The Hong Kong Monetary Authority (HKMA) has completed its annual review of Domestic Systemically Important Authorized Institutions (D-SIBs), confirming that the 2024 list and associated Higher Loss Absorbency (HLA) requirements remain unchanged from 2023. Under the D-SIB framework, designated institutions must integrate an HLA capital buffer (ranging from 1% to 3.5% of CET1 capital based on their systemic importance) within 12 months of notification to mitigate risks to the financial system in the event of failure. This framework, aligned with Basel Committee standards, aims to enhance the resilience of Hong Kong’s banking system.

Resources: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/12/20241231-10/