FSC Decides to Activate CCyB Requirement for Banks and Bank Holding Groups from May 2024

The FSC has announced its intention to impose a 1% CCyB requirement on banks and their holding companies starting 1 May 2024. This strategic move aims to bolster the loss-absorbing capacity of these financial institutions, better preparing them to tackle potential losses.
Following recent decision, domestic banks and bank holding groups will have about one year to prepare and begin to set aside CCyB at one percent starting from 1 May 2024. Based on an impact analysis conducted with the end-2022 data, all banks and bank holding groups’ capital ratios are expected to stay above the regulatory ratio. However, individual banks are expected to make efforts to build up additional capital to maintain their capital buffer at above certain levels. The FSC expects that this will help enhance loss absorbing capacity of banks and boost confidence on the prudential management of domestic banks.