Domestic Systemically Important Banks (D-SIBs) Framework for Oman
Financial crisis of 2007-2009 revealed failure of banks having systemic implications either through their size, complexity and/or interconnectedness. The shocks sent by these systemically important banks through the financial system, in turn, derailed the domestic real economy. Such “Domestic Systemically Important Banks (D-SIBs)” required focused regulatory/supervisory attention to contain the harm they might cause by contagion.
To identify and deal with the D-SIBs in Oman, Central Bank of Oman developed a “Domestic Systemically Important Banks (D-SIBs) Framework for Oman”. The identification of D-SIBs is based on the principles and criteria suggested by Basel Committee on Banking Supervision using an indicator-based approach tailored to the domestic needs and conditions.
The designated D-SIBs in Oman are subject to an enhanced regulatory and supervisory regime that includes Enhanced Capital Surcharge for D-SIBs, a stringent Stress Testing Exercise, requirement to have Board approved Risk Appetite Framework, Recovery & Resolution Planning, and systemic risk focused biannual meetings with the D-SIBs to address any systemic or structural regulatory issues.
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