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MFSA designates new banking rules

Posted: 06 August 2008

An MFSA ruling has determined new banking rules for the review and processing of credit in Malta. Banking Rule BR/12 has been issued - The Supervisory Review Process of Credit Institutions authorised under the Banking Act 1994. The ruling relates to the robustness of a credit institution's internal governance process which is invariably an essential component of the institution's internal capital adequacy assessment process (ICAAP).

The Act requires every credit institution to put in place robust governance arrangements requiring credit institutions to establish their own ICAAP. The rule aims to increase the main attributes of an institution's ICAAP and provides directions in relation to the setting of an institution's business objectives and risk appetite, how a business is organised, how responsibilities and authority are allocated, how reporting lines are set up and what information they convey and how internal control (including risk control, compliance and internal audit) is organised.

The rule has also adopted the additional technical guidance issued by the CEBS to complement its guidelines in the area of stress testing on the Supervisory Review Process (SRP) issued in January 2006.

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