Additional Note to Circular 88-1 to financial institutions
Summary: Additional Note to Circular 88-1 to financial institutions of the Bank of the Republic of Haiti — an instrument published alongside circular 88-1 to financial institutions, not the circular itself. Circulars are the operative prudential rules for supervised institutions, covering matters such as capital and liquidity requirements, credit-risk and governance standards, reserve requirements and foreign-exchange rules.
Key Findings
- This note adds a capital charge rather than delaying one. Subject financial institutions must apply a risk weighting factor of 150 percent to any loan granted from a drawdown on a credit line.
- A 150 percent weight is above the standard weight for ordinary corporate exposure, so the BRH is treating credit-line drawdowns as a higher-risk funding route and pricing that into capital requirements.
- The note states that it forms an integral part of Circular 88-1, which means it is not guidance but an amendment to the operative prudential rule.
- The implementation window is three days: signed on 5 August 2022 and in force from 8 August 2022, unusually short for a change in risk weighting.
- It is addressed to subject financial institutions generally and signed by the Governor.
How to cite
Bank of the Republic of Haiti (BRH), 2022, Additional Note to Circular 88-1 to financial institutions, https://www.brh.ht/wp-content/uploads/Note-additionnelle-No2-Circulaire-88-1.pdf