Systemic important institutions constitute an additional capital buffer intended to reduce the probability of their failure and to increase their capacity to absorb losses in order to ensure their continued operation.

The additional capital conservation buffer provided for in the previous article is set at:

2.5% of net weighted risk when the institution is of high systemic importance ;

1.5% of net weighted risks when the institution is of medium systemic importance ;

1% of net weighted risks when the institution is of low systemic importance.

The additional requirement provided for in this article increases the conservation buffer for core capital and the supplementary buffer set out in Articles 25 and 28 of COBAC Regulation R-2016/03 relating to the net capital of credit institutions. The profit distribution restriction thresholds provided for in Article 26 of the said regulation are increased accordingly.

The Banking Commission may increase the additional buffer
provided for systemic important institutions, without exceeding 3.5%, in order to reduce the impact of their possible failure on the financial system. This situation is envisaged when the Banking Commission considers that the increase in their size and the volume of their exposure in a difficult macroeconomic and financial context may pose a threat to the stability of the financial system.

The Banking Commission may set a liquidity ratio for systemically important institutions of institutions a liquidity ratio 50% higher than the standard set by COBAC regulation R-93/06 on the liquidity of credit institutions.

When the situation so requires, particularly in periods of severe stress or abundant liquidity, this threshold may be lowered or raised by the Banking Commission in order to take into account the overall level of liquidity in the CEMAC region.

Systemic important institutions are subject to specific communication and reporting requirements, according to a frequency and format to be determined by the Secretary General of COBAC depending on the situation of the institution.

In particular, they must communicate information relating to:

– The risk assessment system, which analyses the levels and controls
performed on these risks;

– The capital adequacy assessment process;

– The liquidity adequacy assessment process;

– The capital and liquidity quantification methodology, which assesses the institution’s the institution’s need for capital and liquidity based on the results of risk;

– Asset/liability management;

– Operational, credit and market risk;

– The degree of compliance with current regulations.

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