Back Custom print Link Text Only Rich Text Print

  • Guarantees and Credit Derivatives

    • CA-4.2.21

      Where guarantees or credit derivatives are direct, explicit, irrevocable and unconditional, and the CBB is satisfied that conventional bank licensees fulfil certain minimum operational conditions relating to risk management processes the CBB may allow conventional bank licensees to take account of such credit protection in calculating capital requirements.

      January 2015

    • CA-4.2.22

      A range of guarantors and protection providers are recognised, as shown in Paragraph CA-4.5.7. A substitution approach will be applied. Thus only guarantees issued by or protection provided by entities with a lower risk weight than the counterparty will lead to reduced capital charges since the protected portion of the counterparty exposure is assigned the risk weight of the guarantor or protection provider, whereas the uncovered portion retains the risk weight of the underlying counterparty.

      January 2015

    • CA-4.2.23

      Detailed operational requirements are given in Paragraphs CA-4.5.1 to CA-4.5.5.

      January 2015