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New global capital rules unlikely to have negative impact on S. Korean banks

All News 12:00 January 04, 2018

SEOUL, Jan. 4 (Yonhap) -- South Korea's financial regulator said Thursday that new global bank capital rules are unlikely to have a negative impact on local banks, although their capital adequacy ratios are expected to rise slightly.

In a statement, the Financial Supervisory Service (FSS) said it has started work to encourage local banks to be fully prepared to embrace the stricter banking regulations, known as Basel III, which were agreed upon by financial regulators around the world last December.

The new rules, including revisions to calculation systems for capital requirements and credit risks, were set in the aftermath of the 2008-09 global financial crisis.

If the nation's 17 main banks maintain their asset portfolios, the Basel III rules will cause their capital adequacy ratios under the Bank for International Settlements' standard to rise slightly, the FSS said in the statement.

However, the FSS said the new rules are unlikely to have a negative impact on local banks like a decline in money supply.

To help local lenders cope with the new rules, the FSS said it will hold a public consultation with each bank.

The FSS said it will give the utmost effort for local banks to smoothly adapt to the new rules, which are expected to take effect in 2022.
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