COVID-19: New Precautions For Banking Sector

Recent Development

• The Banking Regulatory and Supervisory Authority (the "BRSA") granted certain reporting exemptions for banks' liquidity requirements through its decision dated March 26, 2020 and numbered 8967.
• The BRSA introduced the following measures, which are applicable until December 31, 2020:
  • Pursuant to Article 32 of the Regulation on the Calculation of the Liquidity Coverage Ratio of Banks (the "Regulation"), if a bank's total and foreign exchange liquidity coverage ratios are less than, or expected to fall below, the minimum ratio required in the Regulation, the bank is obliged to report the reasons for the shortfall and its response measures to the BRSA. The shortfall related to the unconsolidated total and foreign exchange liquidity coverage ratios must be resolved within two weeks after it occurs. The Regulation limits the number of times that a bank can fall short of this ratio in one calendar year to six (including the shortfall cured) in