4.4 National Discretion Items
Effective from Jun 12 2006 - Dec 31 2007
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(Refer to Attached)
National Discretion – The Standardized Approach
| Reference to Basel II Document | Areas of National Discretion | SAMA's Position |
| 54 | Lower RW to claims on sovereign (or Central Bank) in domestic currency if funded in that currency. | Yes |
| 55 | Recognition of ECA's assessments. | No |
| 57 | Claims on domestic PSEs as if banks. | Yes |
| 58 | Claims on domestic PSEs as if sovereigns. | Listed |
| 60-64 | Claims on banks: Opt. 1, RW one category less than sovereign: Opt.2, RW based on the bank's external credit assessment. | Option -2 |
| 64 | Preferential RW treatment for claims on banks with an original maturity of 3 months or less and denominated and funded in the domestic currency. | Yes |
| 67 | Increase standard RW for unrated claims when a higher RW is warranted by the default experience in their jurisdiction. | No |
| 68 | To risk weight all corporate claims at 100% without regard to external ratings. | No |
| 69 | Definition of claims included in regulatory retail portfolio. | Yes |
| 70 | Granularity criterion for the retail portfolio, limit of 0.2% of the overall retail portfolio. | Yes |
| 71 | To increase RWs for regulatory retail exposures. | No |
| 72 | Definition of claims secured by residential mortgages. | Yes |
| 72-73 | To increase preferential RWs for claims secured by residential properties | Yes |
| 74 (FN25) | Commercial real estate 50% RW only if strict conditions are met. | No |
| 75 & 78 | RW for the unsecured portion of a loan past due, net of specific provisions are more than 50%. | No |
| 75 (FN26) | Past due treatment for non-past due loans to counterparties subject to a 150%RW. | No |
| 76 (FN26) | Transitional period of three years for recognition of a wider range of collateral for higher risk categories (past due assets). | No |
| 77 | If a past due loan is fully secured by other forms of collateral, 100% RW may apply when provisions reach 15% of the outstanding amount. | Yes |
| 80 | 150% or higher RW to other assets. | No |
| 81 (FN28) | RW gold bullion at 0%. | Yes |
| 92 | Mapping ECAI's assessments to RWs. | Yes |
| 102 (FN31) | Use a borrower's domestic currency rating for exposure in foreign exchange transactions when loan extended by an MDB. | Yes |
| 108 | Use of unsolicited ratings. | No |
| 201 | Lower RW to claims guaranteed by the sovereign (or central bank), when dominated and funded in domestic currency. | Yes |