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How to improve capital market risk efficiency? A standardized approach for counterparty credit risk
The standardized approach for counterparty credit risk (SA-CCR) is the new global standard for measuring counterparty credit risk (CCR) for derivatives and long-settlement transactions.
Bank Negara Malaysia’s exposure draft on the SA-CCR, issued on 28 November 2025, delivers a more risk-sensitive, netting and collateral-aware exposure framework than previous CCR methods.
For banks operating or planning to implement financial derivatives, the SA-CCR aims to provide a robust method for calculating Exposure at Default (EAD), providing the bedrock for CCR regulatory capital and related prudential metrics to improve risk efficiency.
As Malaysia moves forward with the SA-CCR, it can no longer be treated as a back-office exercise. Sharper calculations and better collateral recognition will define the true impact on capital and ultimately the profitability of every trade executed by the front office.