Guidance on Liquidity Risk Management

In September 2008 the Basel Committee on Banking Supervision (‘the Basel Committee’) issued a paper entitled “Principles for Sound Liquidity Risk Management and Supervision” (‘the Principles’). Previous to issuance, the Basel Committee conducted a fundamental review of its guidance issued in February 2000 entitled “Sound Practices for Managing Liquidity in Banking Organisations” in light of financial market developments and the recent market turmoil.

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General guidance to form BSL/2

Form BSL/2 is a suite of Modules introducing Basel II-compliant reporting in Nevis for Banks licensed under the Nevis International Banking Ordinance, 2014.

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Guidance to completing the Standardised Approach to Credit Risk module of BSL/2

Every incorporated international bank will be required to use the standardised approach to calculate its credit risk capital requirement and complete the Standardised Approach to Credit Risk module (Module 1) of the BSL/2 return. The return covers the bank’s balance sheet assets and off-balance sheet exposures in its banking book, including OTC derivative contracts.

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Guidance to completing the Operational Risk module of BSL/2

This module relates to reporting operational risk by banks licensed under the Nevis International Banking Ordinance, 2014 and incorporated under the Companies Ordinance under the Operational Risk module of the BSL/2 return. “Basel II” is the revised international capital framework set out by the Basel Committee on Banking Supervision in its paper “International Convergence of Capital Measurement and Capital Standards: A Revised Framework – Comprehensive Version”, published in June 2006 (“ the Basel II document”).

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Guidance to completing the Market Risk module of BSL/2

This guidance outlines the Regulator’s reporting requirements for calculating how much capital should be held by banks against potential losses arising out of market risk.

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