Table of Contents
The Basel Framework (updated 27 November 2024)SCO Scope and definitions (updated 17 July 2024)SCO10 Introduction (paras. 10.1-10.5) (effective as of 15 December 2019)SCO30 Banking, securities and other financial subsidiaries (paras. 30.1-30.7) (effective as of 15 December 2019)SCO40 Global systemically important banks (paras. 40.1-40.31) (effective as of 1 January 2027)SCO50 Domestic systemically important banks (paras. 50.1-50.20) (effective as of 15 December 2019)SCO60 Cryptoasset exposures (paras. 60.1-60.131) (effective as of 1 January 2026)SCO95 Glossary and abbreviations (effective as of 1 January 2023)CAP Definition of capital (updated 5 June 2020)CAP10 Definition of eligible capital (paras. 10.1-10.26) (effective as of 15 December 2019) (updated 5 June 2020)CAP30 Regulatory adjustments (paras. 30.1-30.34) (effective as of 15 December 2019)CAP50 Prudent valuation guidance (paras. 50.1-50.14) (effective as of 15 December 2019)CAP90 Transitional arrangements (paras. 90.1-90.19) (effective as of 3 April 2020)CAP99 Application guidance (paras. 99.1 - 99.14) (effective as of 15 December 2019)RBC Risk-based capital requirements (updated 8 November 2023)RBC20 Calculation of minimum risk-based capital requirements (paras. 20.1-20.18) (effective as of 1 January 2028)RBC25 Boundary between the banking book and the trading book (paras. 25.1-25.34) (effective as of 1 January 2023)RBC30 Buffers above the regulatory minimum (paras. 30.1-30.23) (effective as of 1 January 2027)RBC40 Systemically important bank buffers (paras. 40.1-40.23) (effective as of 15 December 2019)RBC90 Transitional arrangements (paras. 90.1-90.2) (effective as of 01 January 2023)CRE Calculation of RWA for credit risk (updated 27 November 2024)CRE20 Standardised approach: individual exposures (paras. 20.1-20.110) (effective as of 1 January 2028)CRE21 Standardised approach: use of external ratings (paras. 21.1-21.18) (effective as of 1 January 2023)CRE22 Standardised approach: credit risk mitigation (paras. 22.1-22.105) (effective as of 1 January 2023)CRE30 IRB approach: overview and asset class definitions (paras. 30.1-30.52) (effective as of 1 January 2023)CRE31 IRB approach: risk weight functions (paras. 31.1-31.45) (effective as of 1 January 2023)CRE32 IRB approach: risk components for each asset class (paras. 32.1-32.60) (effective as of 1 January 2023)CRE33 IRB approach: supervisory slotting approach for specialised lending (paras. 33.1-33.16) (effective as of 15 December 2019)CRE34 IRB approach: RWA for purchased receivables (paras. 34.1-34.12) (effective as of 1 January 2023)CRE35 IRB approach: treatment of expected losses and provisions (paras. 35.1-35.10) (effective as of 1 January 2023)CRE36 IRB approach: minimum requirements to use IRB approach (paras. 36.1-36.148) (effective as of 1 January 2023)CRE40 Securitisation: general provisions (paras. 40.1-40.165) (effective as of 1 January 2023)CRE41 Securitisation: standardised approach (paras. 41.1-41.22) (effective as of 15 December 2019)CRE42 Securitisation: External-ratings-based approach (SEC-ERBA) (paras. 42.1-42.14) (effective as of 15 December 2019)CRE43 Securitisation: Internal assessment approach (SEC-IAA) (paras. 43.1-43.4) (effective as of 15 December 2019)CRE44 Securitisation: Internal-ratings-based approach (paras. 44.1-44.29) (effective as of 1 January 2023)CRE45 Securitisations of non-performing loans (paras. 45.1-45.7) (effective as of 1 January 2023)CRE50 Counterparty credit risk definitions and terminology (paras. 50.1-50.36) (effective as of 15 December 2019)CRE51 Counterparty credit risk overview (paras. 51.1-51.16) (effective as of 1 January 2023)CRE52 Standardised approach to counterparty credit risk (paras. 52.1-52.77) (effective as of 1 January 2023)CRE53 Internal models method for counterparty credit risk (paras. 53.1-53.71) (effective as of 1 January 2023)CRE54 Capital requirements for bank exposures to central counterparties (paras. 54.1-54.42) (effective as of 1 January 2023)CRE55 Counterparty credit risk in the trading book (paras. 55.1-55.4) (effective as of 1 January 2023)CRE56 Minimum haircut floors for securities financing transactions (paras. 56.1-56.13) (effective as of 1 January 2023) (updated 1 July 2021)CRE60 Equity investments in funds (paras. 60.1-60.20) (effective as of 1 January 2023)CRE70 Capital treatment of unsettled transactions and failed trades (paras. 70.1-70.12) (effective as of 15 December 2019)CRE90 Transition (paras. 90.1-90.3) (effective as of 1 January 2023)CRE99 Application guidance (paras. 99.1-99.133) (effective as of 1 January 2023)MAR Calculation of RWA for market risk (updated 26 November 2020)MAR10 Market risk terminology (paras. 10.1-10.35) (effective as of 1 January 2023)MAR11 Definitions and application of market risk (paras. 11.1-11.9) (effective as of 1 January 2023)MAR12 Definition of trading desk (paras. 12.1-12.6) (effective as of 1 January 2023)MAR20 Standardised approach: general provisions and structure (paras. 20.1-20.5) (effective as of 1 January 2023)MAR21 Standardised approach: sensitivities-based method (paras. 21.1-21.101) (effective as of 1 January 2023)MAR22 Standardised approach: default risk capital requirement (paras. 22.1-22.45) (effective as of 1 January 2023)MAR23 Standardised approach: residual risk add-on (paras. 23.1-23.8) (effective as of 1 January 2023)MAR30 Internal models approach (paras. 30.1-30.71) (effective as of 1 January 2023)MAR31 Internal models approach: model requirements (paras. 31.1-31.26) (effective as of 1 January 2023)MAR32 Internal models approach: backtesting and P&L attribution test requirements (paras. 32.1-32.45) (effective as of 1 January 2023)MAR33 Internal models approach: capital requirements calculation (paras. 33.1-33.46) (effective as of 1 January 2023)MAR40 Simplified standardised approach (paras. 40.1-40.86) (effective as of 1 January 2023)MAR50 Credit valuation adjustment framework (paras. 50.1-50.77) (effective as of 1 January 2023)MAR90 Transitional arrangements (para. 90.1) (effective as of 1 January 2023)MAR99 Application guidance (paras. 99.1-99.69) (effective as of 1 January 2023)OPE Calculation of RWA for operational risk (updated 8 November 2023)OPE10 Definitions and application (paras. 10.1-10.9) (effective as of 1 January 2023)OPE20 Basic indicator approach (paras. 20.1-20.5) (effective as of 15 December 2019) (updated 27 March 2020)OPE25 Standardised approach (paras. 25.1-25.26) (effective as of 1 January 2027)OPE30 Advanced Measurement Approaches (paras. 30.1-30.22) (effective as of 15 December 2019) (updated 27 March 2020)LEV Leverage ratio (updated 27 March 2020)LEV10 Definitions and application (paras. 10.1-10.2) (effective as of 1 January 2023)LEV20 Calculation (paras. 20.1-20.7) (effective as of 1 January 2023)LEV30 Exposure measurement (paras. 30.1-30.53) (effective as of 1 January 2023)LEV40 Leverage ratio requirements for global systemically important banks (paras. 40.1-40.5) (effective as of 01 January 2023)LEV90 Transition (paras. 90.1-90.2) (effective as of 01 January 2023)LCR Liquidity Coverage Ratio (updated 5 June 2020)LCR10 Definitions and application (paras. 10.1-10.9) (effective as of 15 December 2019)LCR20 Calculation (paras. 20.1-20.8) (effective as of 15 December 2019)LCR30 High-quality liquid assets (paras. 30.1-30.47) (effective as of 15 December 2019) (updated 5 June 2020)LCR31 Alternative liquidity approaches (paras. 31.1-31.61) (effective as of 15 December 2019)LCR40 Cash inflows and outflows (paras. 40.1-40.93) (effective as of 15 December 2019)LCR90 Transition (paras. 90.1-90.2) (effective as of 15 December 2019)LCR99 Application guidance (para. 99.1) (effective as of 15 December 2019)NSF Net stable funding ratioNSF10 Definitions and applications (paras. 10.1-10.6) (effective as of 15 December 2019)NSF20 Calculation and reporting (paras. 20.1-20.3) (effective as of 15 December 2019)NSF30 Available and required stable funding (paras. 30.1-30.37) (effective as of 15 December 2019)NSF99 Definitions and applications (paras. 99.1-99.6) (effective as of 15 December 2019)LEX Large exposures (updated 27 March 2020)LEX10 Definitions and application (paras. 10.1-10.18) (effective as of 1 January 2023)LEX20 Requirements (paras. 20.1-20.4) (effective as of 15 December 2019)LEX30 Exposure measurement (paras. 30.1-30.59) (effective as of 1 January 2023)LEX40 Large exposure rules for global systemically important banks (paras. 40.1-40.3) (effective as of 15 December 2019)MGN Margin requirements (updated 3 April 2020)MGN10 Definitions and application (paras. 10.1-10.16) (effective as of 15 December 2019)MGN20 Requirements (paras. 20.1-20.44) (effective as of 15 December 2019)MGN90 Transition (paras. 90.1-90.7) (effective as of 3 April 2020)SRP Supervisory review process (updated 27 March 2020)SRP10 Importance of supervisory review (paras. 10.1-10.5) (effective as of 15 December 2019)SRP20 Four key principles (paras. 20.1-20.45) (effective as of 15 December 2019)SRP30 Risk management (paras. 30.1-30.52) (effective as of 15 December 2019)SRP31 Interest rate risk in the banking book (paras. 31.1- 31.129) (effective as of 15 December 2019)SRP32 Credit risk (paras. 32.1-32.59) (effective as of 1 January 2023)SRP33 Market risk (paras. 33.1-33.9) (effective as of 1 January 2023)SRP34 Operational risk (paras. 34.1-34.2) (effective as of 15 December 2019) (updated 27 March 2020)SRP35 Compensation practices (paras. 35.1-35.9) (effective as of 15 December 2019)SRP36 Risk data aggregation and risk reporting (paras. 36.1-36.74) (effective as of 15 December 2019)SRP50 Liquidity monitoring metrics (paras. 50.1-50.92) (effective as of 15 December 2019)SRP90 Transition (paras. 90.1-90.2) (effective as of 15 December 2019)SRP98 Application guidance on interest rate risk in the banking book (paras. 98.1-98.61) (effective as of 15 December 2019)SRP99 Application guidance (paras. 99.1-99.10) (effective as of 15 December 2019)DIS Disclosure requirements (updated 8 November 2023)DIS10 Definitions and applications (paras. 10.1-10.30) (effective as of 1 January 2027)DIS20 Overview of risk management, key prudential metrics and RWA (paras. 20.1-20.5) (effective as of 1 January 2023)DIS21 Comparison of modelled and standardised RWA (paras. 21.1-21.2) (effective as of 1 January 2023)DIS25 Composition of capital and TLAC (paras. 25.1-25.5) (effective as of 15 December 2019)DIS26 Capital distribution constraints (paras. 26.1-26.2) (effective as of 1 January 2023)DIS30 Links between financial statements and regulatory exposures (paras. 30.1-30.4) (effective as of 15 December 2019)DIS31 Asset encumbrance (paras. 31.1-31.3) (effective as of 1 January 2023)DIS35 Remuneration (paras. 35.1-35.4) (effective as of 15 December 2019)DIS40 Credit risk (paras. 40.1-40.2) (effective as of 1 January 2023)DIS42 Counterparty credit risk (paras. 42.1-42.2) (effective as of 1 January 2023)DIS43 Securitisation (paras. 43.1-43.3) (effective as of 15 December 2019)DIS50 Market risk (paras. 50.1-50.2) (effective as of 1 January 2023)DIS51 Credit valuation adjustment risk (para. 51.1) (effective as of 1 January 2027)DIS60 Operational risk (para. 60.1) (effective as of 1 January 2023)DIS70 Interest rate risk in the banking book (paras. 70.1-70.6) (effective as of 15 December 2019)DIS75 Macroprudential supervisory measures (paras. 75.1-75.3) (effective as of 1 January 2027)DIS80 Leverage ratio (paras. 80.1-80.2) (effective as of 1 January 2023)DIS85 Liquidity (paras. 85.1-85.2) (effective as of 15 December 2019)DIS99 Worked examples (paras. 99.1-99.4) (effective as of 15 December 2019)BCP Core Principles for effective banking supervision (updated 25 April 2024)BCP01 Foreword (paras. 01.1-01.5) (effective as of 25 April 2024)(paras. 01.1-01.5) (effective as of 25 April 2024)BCP02 Introduction to the Core Principles (paras. 02.1-02.21) (effective as of 25 April 2024)Introduction (paras. 02.1-02.4) (effective as of 25 April 2024)General approach (paras. 02.5-02.8) (effective as of 25 April 2024)Proportionality (paras. 02.9-02.13) (effective as of 25 April 2024)Revisions to the Core Principles (paras. 02.14-02.21) (effective as of 25 April 2024)BCP10 Explanation of certain terms used in the Core Principles (paras. 10.1-10.) (effective as of 25 April 2024)(para. 10.01) (effective as of 25 April 2024)BCP20 Assessment methodology (paras. 20.1-20.) (effective as of 25 April 2024)(paras. 20.1-20.3) (effective as of 25 April 2024)Use of the assessment methodology (paras. 20.4-20.5) (effective as of 25 April 2024)Assessment of compliance (paras. 20.6-20.12) (effective as of 25 April 2024)Practical considerations in conducting an assessment (paras. 20.13-20.21) (effective as of 25 April 2024)BCP30 Preconditions for effective banking supervision (paras. 30.1-30.8) (effective as of 25 April 2024)(paras. 30.1-30.8) (effective as of 25 April 2024) BCP40 The Core Principles and assessment criteria (paras. 40.1-40.67) (effective as of 25 April 2024)Introduction (paras. 40.1-40.3) (effective as of 25 April 2024)Principle 1 - Responsibilities, objectives and powers (paras. 40.4-40.5) (effective as of 25 April 2024)Principle 2 - Independence, accountability, resourcing and legal protection for supervisors (paras. 40.6-40.7) (effective as of 25 April 2024)Principle 3 - Cooperation and collaboration (paras. 40.8-40.9) (effective as of 25 April 2024)Principle 4 - Permissible activities (paras. 40.10-40.11) (effective as of 25 April 2024)Principle 5 - Licensing criteria (paras. 40.12-40.13) (effective as of 25 April 2024)Principle 6 - Transfer of significant ownership (paras. 40.14-40.15) (effective as of 25 April 2024)Principle 7 - Major acquisitions (paras. 40.16-40.17) (effective as of 25 April 2024)Principle 8 - Supervisory approach (paras. 40.18-40.19) (effective as of 25 April 2024)Principle 9 - Supervisory techniques and tools (paras. 40.20-40.22) (effective as of 25 April 2024)Principle 10 - Supervisory reporting (paras. 40.23-40.24) (effective as of 25 April 2024)Principle 11 - Corrective and sanctioning powers of supervisors (paras. 40.25-40.26) (effective as of 25 April 2024)Principle 12 - Consolidated supervision (paras. 40.27-40.29) (effective as of 25 April 2024)Principle 13 - Home-host relationships (paras. 40.30-40.31) (effective as of 25 April 2024)Principle 14 - Corporate governance (paras. 40.32-40.33) (effective as of 25 April 2024)Principle 15 - Risk management process (paras. 40.34-40.35) (effective as of 25 April 2024)Principle 16 - Capital adequacy xxx (paras. 40.36-40.38) (effective as of 25 April 2024)Principle 17 - Credit risk (paras. 40.39-40.40) (effective as of 25 April 2024)Principle 18 - Problem assets, provisions and reserves (paras. 40.41-40.42) (effective as of 25 April 2024)Principle 19 - Concentration risk and large exposure limits (paras. 40.43-40.45) (effective as of 25 April 2024)Principle 20 - Transactions with related parties (paras. 40.46-40.47) (effective as of 25 April 2024)Principle 21 - Country and transfer risks (paras. 40.48-40.49) (effective as of 25 April 2024)Principle 22 - Market risk (paras. 40.50-40.51) (effective as of 25 April 2024)Principle 23 - Interest rate risk in the banking book (paras. 40.52-40.53) (effective as of 25 April 2024)Principle 24 - Liquidity risk (paras. 40.54-40.55) (effective as of 25 April 2024)Principle 25 - Operational risk and operational resilience (paras. 40.56-40.58) (effective as of 25 April 2024)Principle 26 - Internal control and audit (paras. 40.59-40.60) (effective as of 25 April 2024)Principle 27 - Financial reporting and external audit (paras. 40.61-40.63) (effective as of 25 April 2024)Principle 28 - Disclosure and transparency (paras. 40.64-40.65) (effective as of 25 April 2024)Principle 29 - Abuse of financial services (paras. 40.66-40.67) (effective as of 25 April 2024)BCP98 Update on Committee standards, guidelines and sound practices (paras. 98.1-98.4) (effective as of 25 April 2024)(paras. 98.1-98.4) (effective as of 25 April 2024)BCP99 Structure and guidance for assessment reports prepared by the International Monetary Fund and World Bank (paras. 99.1-99.22) (effective as of 25 April 2024)(paras. 99.1-99.22) (effective as of 25 April 2024)
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Principle 19 - Concentration risk and large exposure limits (paras. 40.43-40.45) (effective as of 25 April 2024)
40.43 Principle 19: [Reference documents: BCBS, High-level considerations on proportionality, July 2022; Joint Forum, Cross-sectoral review of group-wide identification and management of risk concentrations, April 2008; BCBS, Principles for the management of credit risk, September 2000; LEX10, LEX20, LEX30, LEX40.] The supervisor determines that banks have adequate policies and processes to identify, measure, evaluate, monitor, report and control or mitigate concentrations of risk on a timely basis. Supervisors set prudential limits to restrict bank exposures to single counterparties or groups of connected counterparties. [Connected counterparties may include natural persons as well as legal persons. Two or more natural or legal persons shall be deemed a group of connected counterparties if at least one of the following criteria is satisfied: (a) control relationship: one of the counterparties, directly or indirectly, has control over the other(s); or (b) economic interdependence: if one of the counterparties were to experience financial problems, the other(s), as a result, would also be likely to encounter financial difficulties.] At least for internationally active banks, large exposure requirements are not less stringent than the applicable Basel
standard.
40.44 Essential criteria: