The Regulation On Prevention Plans To Be Prepared By Systemically Important Banks Has Been Amended

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The Regulation on Prevention Plans to be Prepared by Systemically Important Banks ("Regulation") was published in the Official Gazette, dated 16 March 2021 ...
Turkey Finance and Banking
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The Regulation on Prevention Plans to be Prepared by Systemically Important Banks ("Regulation") was published in the Official Gazette, dated 16 March 2021 and numbered 31425, by the Banking Regulation and Supervision Agency ("BRSA") to determine the principles and procedures regarding the preparation and implementation of prevention plans by banks identified as systemically important on a consolidated basis.

As per the announcement made by the BRSA on 29 March 2024, it was decided to make some amendments to the Regulation to address the issues encountered during its implementation period. The significant changes made with the Amendment Regulation are as follows:

  • The title of Article 14 of the Regulation, previously titled "Impact Assessment," has been amended as "Impacts of the Prevention Plan Measures," and the framework for assessing the impacts of Precautionary Measures has been determined.
  • Two additional paragraphs, numbered 7 and 8, have been added to the same article, as follows:
  • (7) The capacity of the prevention plan is calculated on a scenario-by-scenario basis, separately for capital and liquidity adequacy, considering the scenarios where equity and liquidity indicators are most adversely affected, and the timing of the emergence of the effects is disclosed.
  • (8) Once the prevention plan capacity has been calculated, in case of planning modifications to enhance the effectiveness of contingency plan measures or creating new contingency plan measures, taking into account these changes, the potential contingency plan capacity is recalculated.
  • An additional provision has been added to the end of the sixth paragraph of Article 19, titled "Principles Regarding Prevention Plan Scenarios and Scenario Analysis," stating: "If it is concluded that the threshold values of the prevention plan indicators do not adequately warn the bank for the implementation and emergence of the effects of contingency plan measures, the indicators and/or thresholds related to the indicators are reviewed".
  • A new provision has been added as the 9th paragraph to the same article:
  • Inconsistencies identified among different sections of the prevention plan as a result of scenario analysis are addressed before submission of the prevention plans to the Authority, or if it is not possible to address them, the timeline for addressing the inconsistencies is disclosed in the prevention plan.
  • The deadline for systemically important banks covered by the Regulation to submit their prevention plans to the BRSA, which they will prepare by the end of every year within the scope of the Regulation, has been changed from the end of March to the end of June.
  • Some revisions have been made to the prevention plan indicators in the annex of the Regulation.

The full text of the Amendment Communiqué is accessible via this link. (Only available in Turkish)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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