13:03, 17 October 2019
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Central Bank continues to introduce international standards for banking capital calculation
The capital calculation methodology has been updated to introduce an additional deduction from the sources of additional capital of banks with a universal license for investments in the so-called TLAC instruments of global systemically important banks (G-SIB). TLAC instruments are financial instruments that ensure the ability to absorb losses of G-SIB at the stage of their bail-out through terminating liabilities on instruments or converting claims thereon into ordinary shares of global systemically important banks.
The Bank of Russia has also introduced a requirement to gradually exclude from banks’ capital government support instruments provided before 1 March 2013 and not complying with Bank of Russia Regulation No. 646-P of 4 July 2018, ‘On the Methodology for Measuring Credit Institution Capital (Basel III)’ (beginning from the effective date of the updated Capital Calculation Methodology – in the amount of 50%, and from 1 January 2020 – 100% of the amount available as of 1 January 2018).
The approved amendments to the credit institutions’ capital calculating methodology are in tune with the international regulation approaches established by the Basel Committee on Banking Supervision.
Bank of Russia Ordinance No. 5163-U was registered with the Ministry of Justice of the Russian Federation and became effective on 14 October 2019.