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Risk Management News Updates, January 12th 2011

This week's risk management news includes BIS Board's new vice chairman, RBI's regulations on AMA for operational risk capital charge, PBOC's guidelines on reserve requirement ratios for large banks, and FDIC's proposed new disclosure requirements for mortgage securities

January 12, 2011 | Aditya Puri

Masaaki Shirakawa named vice chairman of BIS Board
Masaaki Shirakawa, governor of the Bank of Japan, has been appointed the vice chairman of the board of directors of the Bank for International Settlements (BIS) for a three year term. He succeeds Hans Tietmeyer who had held the post from 2003 until 2010.

RBI issues draft guidelines on AMA for calculating operational risk capital charge
The Reserve Bank of India (RBI), the country’s central bank, has released draft guidelines on Advanced Measurement Approach (AMA) for calculating operational risk capital charge and has invited comment. It had said in July, 2009, that banks can apply for migrating to Advanced Measurement Approach (AMA) for Operational Risk from April 1, 2012 onwards.

PBOC issues new regulations regarding reserve requirement ratios
The People’s Bank of China, the country’s central bank, has issued guidelines regarding reserve requirement ratios to a large government-owned bank. The guidelines, which may be applicable to similar banks, include a formula for determining a bank's reserve ratio and specific directives on basing the adjustment of the ratios partly on modifications in banks' loan growth and capital adequacy levels.

FDIC may impose new disclosure requirements regarding mortgage securities on big banks
US-based Federal Deposit Insurance Corporation (FDIC) may consider imposing new disclosure requirements on big banks that want to package and sell mortgage securities to investors, in an effort to prevent more home foreclosures. Banks may need to reveal the impact to second lien loans, those extended to finance home renovations or expensive purchases, should customers fail to pay the primary loans or mortgages.

Re-disseminated by The Asian Banker

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