Basel III capital regulations will be gradually implemented to the banking sector from December 2013 as the revised Regulation on Supervision of Banking Institutions is scheduled to take effect.
A. Minimum Capital Ratio
- Before revision: Total capital ratio (8%)
- After revision: Minimum common equity capital ratio (4.5%), minimum Tier 1 capital ratio (6%), minimum total capital ratio (8%) (effective from Dec. 1, 2013)
B. Capital Buffer
- Banking institutions must accumulate 2.5%p of capital buffer in addition to the minimum capital ratio. (effective from Jan. 1, 2016)
C. Prompt Corrective Action
- The financial authorities will take prompt corrective action against financial institutions which fail to satisfy minimum level of total capital ratio, Tier 1 capital ratio, and common equity capital ratio. (effective from Jan. 1, 2015)
<Basel III Implementation Schedule>
|
|
Dec.1, 2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
|
▪
Minimum Common
Equity Capital Ratio (A) |
3.5 |
4.0 |
4.5 |
4.5 |
4.5 |
4.5 |
4.5 |
|
▪
Minimum Tier 1
Capital Ratio |
4.5 |
5.5 |
6.0 |
6.0 |
6.0 |
6.0 |
6.0 |
|
▪
Minimum Total Capital (C) |
8.0 |
8.0 |
8.0 |
8.0 |
8.0 |
8.0 |
8.0 |
|
▪
Capital Conservation Buffer (B) |
|
|
|
0.625 |
1.25 |
1.875 |
2.50 |
|
- Minimum Total Capital
Plus Conservation Buffer (B+C) |
8.0 |
8.0 |
8.0 |
8.625 |
9.25 |
9.875 |
10.5 |
*Please read the attached file for details.