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NAFR Issues Measures for Country Risk Management
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Chinese
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Category：Legislative Updates
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Subject：Finance
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Keywords：banking industry; financial institution; country risk management
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Source：Pkulaw
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Publish Date：11-30-2023
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The Measures for Country Risk Management of Banking Financial Institutions, as formulated by the National Financial Regulatory Administration (NAFR) based on the revisions to the Guidelines for Country Risk Management of Banking Financial Institutions, are officially promulgated.
Under the principle of comprehensive risk coverage, the Measures further define the standards for the measurement of country risk exposure. To avoid duplicate risk reserves as set forth in the Guidelines, the Measures incorporate country risk reserves into owner's equities as part of general reserves. Besides, the scope and ratio of provisions for country risk reserves have been improved. Loan commitments and financial guarantees are included in the provisions for country risk reserves, with a moderate decrease in the provision ratio. Further, the Measures also elaborate on the division of responsibilities for country risk management among banking financial institutions and impose definitive requirements for the transfer of country risk.
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