Bank Negara Issues Framework On Domestic Systemically Important Banks

Bank Negara Malaysia (‘BNM’) issued a policy document on the Domestic Systemically Important Banks Framework and a set of related Frequently Asked Questions on 5 February 2020.

The policy document sets out the assessment methodology used by BNM to identify Domestic Systemically Important Banks (‘D-SIB’) whose distress or failure have the potential to cause considerable disruption to the domestic financial system and the wider economy.

A D-SIB is required to maintain higher capital buffer (including a Higher Loss Absorbency (‘HLA’) requirement) to mitigate the risk posed to the stability of the Malaysian financial system and economy in the event of distress or failure of the D-SIB.