CNB Bank Board approved "Provision on Capital Adequacy Incorporating Credit and Market Risk"

At its meeting today, the CNB Bank Board approved a "Provision on Capital Adequacy Incorporating Credit and Market Risk". This new banking supervision regulation complies with the internationally recognised standards ensuing from the relevant EU and Basle Committee for Banking Supervision directives.

This Provision, which has been prepared and verified in co-operation with the commercial banks, will enter into force on 1 April 2000. It will replace the following three CNB provisions: the Provision on capital adequacy, which takes into consideration only credit risk in the calculation of capital needs, the Provision on credit risk exposure and the Provision on foreign exchange positions. The new Provision requires banks to cover with capital in a minimum required amount not only credit risk, but also the market risks (currency, share, interest-rate and commodity risks) to which they are exposed.

CNB - M. Švehla