31 January 2018
The Monetary Authority of Singapore (“MAS”) has revised MAS Notice 637 on Risk Based Capital Adequacy Requirements for Banks Incorporated in Singapore (“MAS Notice 637”) to introduce a minimum leverage ratio requirement of 3% from 1 January 2018.
This was announced on 28 December 2017 in MAS’ Response to feedback received from a public consultation it conducted from 25 July 2017 to 25 August 2017. The other revisions to MAS Notice 637 arising from the public consultation, such as technical enhancements to the capital treatment of equity investments and a refinement of the definition of default under the Internal Ratings Based Approach for credit risk, also took effect from 1 January 2018. In its Response, MAS stated that feedback received from the pubic consultation had been considered and incorporated into the revised MAS Notice 637 where appropriate.
MAS added that the respondents generally supported the proposal to introduce the minimum leverage ratio requirement of 3%. MAS stated that it would further consult the industry prior to implementing any further changes to the definition of the leverage ratio, including the revisions published by the Basel Committee on Banking Supervision (BCBS) on 7 December 2017.
The following materials are available on the MAS website www.mas.gov.sg:
- MAS Notice 637 on Risk Based Capital Adequacy Requirements for Banks Incorporated in Singapore (effective 1 January 2018)
- MAS Notice 637 (Amendment No. 3) 2017
- MAS Response to feedback on consultation paper on “Proposed Amendments to Capital Requirements for Singapore-Incorporated Banks in MAS Notice 637”