Ring Fencing
From Open Risk Manual
Definition
Ring Fencing is the supervisory process of protecting the assets or liquidity of a foreign branch or subsidiary by limiting its exposures or liabilities to the parent bank and banking group.
In the context of a conglomerate entity, the term is used to describe the process of protecting a bank from adverse impact of events occurring in the wider corporate group, especially those engaging in unsupervised activities.[1]
References
- ↑ BCBS, Supervisory Guidance on Dealing with Weak Banks, March 2002
