FME issues two new guidelines

20.4.2007

The FME issues guidelines No. 1/2007 to promote a common framework for supervisory disclosure as well as guidelines No. 2/2007 on stress testing, concentration risk and interest rate risk. The FME issued new rules on the Capital Requirement and Risk Weighted Assets of Financial Undertakings No. 215/2007 and on large exposures No. 216/2007 in March 2007 and new international rules on capital requirements for credit institutions took effect on January 1, 2007. The new rules are based on standards of the Basel Committee of Banking Supervision; Basel II: International Convergence of Capital Measurement and Capital Standards. The framework rests on three pillars. The objective of Pillar II is to enhance the link between a credit institution’s risk profile, its risk management and risk mitigation systems, and its capital requirements. The guidelines of the Committee of European Banking Supervisors (CEBS) on Supervisory Review Process are issued, among other things, due to an increased need for cross-border cooperation of supervisory authorities.  The guidelines, also of CEBS, on stress testing, concentration risk and interest rate risk are part of this process.

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