The prudential requirements standard is a set of rules and regulations imposed on EMIs (Electronic Money Institutions) to ensure financial stability and soundness. These requirements are designed to minimize the risks these institutions may face and protect consumers and the financial system. In this way, the EMIs are intended to be more resistant in times of crisis. Although these parameters may vary between each country, we can mention the most frequent ones:
- Capital reserve: Financial institutions must maintain a level of capital to absorb possible unexpected losses. This capital acts as a kind of “security reserve,” which is essential for their financial stability.
- Risk Management: Entities must have systems and procedures to identify, measure, manage, and control the risks to which they are exposed, such as market, operational, and liquidity risks.
- Transparency: Institutions must provide accurate information about their financial situation and risks, allowing regulators, investors, customers, and the general public to make informed decisions.
- Supervision: Regulatory authorities frequently supervise financial institutions to ensure they comply with prudential requirements and intervene if an institution faces financial problems.
For more information about Pilsenga products or services, you can visit the following link.