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Effective from Oct 01 2022 - Sep 30 2022 To view other versions open the versions tab on the right
5.1
Banks should be prudent in managing their investments, and ensure the safety of their capital and liquidity taking into consideration the following:
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Properly managing investment concentration to avoid the potential loss of one investment negatively affecting the whole investment portfolio.
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Properly managing the liquidity of their investment portfolio to meet cash requirements and any liabilities as they fall due.
5.2
Banks should review and monitor their investment portfolio and make sure that their decisions and portfolio management practices comply with SAMA’s regulations and the bank’s policies and procedures.
5.3
Banks’ investment decisions must be associated with a proper documented rationale taking into consideration the economic environment, investment maturity, price volatility, market behavior, credit risk, concentration risk, legal risk and all other applicable risks. In addition, banks should focus on understanding the investment structures including any associated risks and potential payoffs.
