Agreement on Early Intervention Measures for Financial Institutions
关于对金融机构采取早期干预措施的协议
ຂໍ້ຕົກລົງ ວ່າດ້ວຍ ມາດຕະການແຕ່ຫົວທີຕໍ່ສະຖາບັນການເງິນ
Summary
The Bank of the Lao PDR issued regulations on principles and rules for early intervention measures in financial institutions, classifying weak institutions into three tiers with corresponding measures to prevent deterioration into crises and maintain financial system stability.
Articles
Article 1
Purpose. This Agreement prescribes the principles and regulations concerning early intervention measures for financial institutions, serving as a basis for the Bank of the Lao PDR to organize and implement various measures appropriately, timely, and commensurate with the risk of the financial institution, in order to prevent and curb the weakness of a financial institution from evolving into a threat to the safety and stability of the financial institution system, aiming to make the financial institution system strong and capable of contributing to the socio-economic development of the Lao PDR.
Article 2
Early intervention measures. Early intervention measures for a financial institution refer to various measures implemented by the Bank of the Lao PDR in accordance with laws, relevant regulations, and this Agreement, aimed at preventing or early addressing problematic conditions that may or will lead to the weakness of the financial institution, with the purpose of curbing the financial institution from falling into crisis.
Article 3
Interpretation of Terms. The terms used in this Agreement shall have the following meanings: 1. Financial Institution: means a bank, a microfinance institution accepting deposits, and a credit and savings cooperative; 2. Bank: means a commercial bank established under Lao law and a branch of a foreign commercial bank; 3. Consolidated Management: means the management of a financial institution that incorporates the business of companies within the group of such financial institution, to enhance the strength and stability of the group; 4. Capital Adequacy: means the capital adequacy ratio of a financial institution, calculated in accordance with regulations issued by the Bank of the Lao PDR from time to time; 5. Systemically Important Commercial Bank: means a commercial bank as defined in Article 3 of the Law on Commercial Banks.
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