Hong Kong Regulations

BANKING (CAPITAL) RULES - SECT 5

Authorized institution shall only use STC approach, BSC approach or IRB approach to calculate its credit risk for non-securitization exposures

Division 2—Prescribed approaches to calculation of credit risk for
non-securitization exposures

(1) An authorized institution—

   (a)  subject to paragraphs (b) and (c), shall use the STC approach to
        calculate its credit risk for non-securitization exposures;

   (b)  may use the BSC approach to calculate its credit risk for
        non-securitization exposures only if it has the approval to do so
        under section 6(2)(a);

   (c)  may use the IRB approach to calculate its credit risk for
        non-securitization exposures only if it has the approval to do so
        under section 8(2)(a).

(2) Subsection (1) does not prevent an authorized institution from using any
combination of the STC approach, BSC approach and IRB approach to calculate
its credit risk for non-securitization exposures if that combination is
expressly permitted by, and in accordance with, another section of these
Rules.