BACKGROUND
Korea has already finalized preparation of relevant rules for the implementation of Basel III. However, authorities postponed the initially scheduled date for implementation (Jan.1, 2013) considering the uncertainty of adoption status of other member countries and decided to adjust Basel III implementation schedule after closely monitoring the progress of other member countries.
CURRENT TREND
As of April, 23 among 27 Basel Committee on Banking Supervision member countries finalized the implementation schedule.
< Basel III implementation Schedule (as of April 30, 2013)>
|
Region |
Implementation Schedule |
Member Countries |
|
Asia |
Not finalized(2) |
Korea, Indonesia |
|
Finalized(7) |
Japan, Singapore, Hong
Kong, China, India, Saudi Arabia, Australia |
|
|
Europe |
Not finalized(1) |
Turkey |
|
Finalized(11) |
Switzerland, Russia, EU(UK, France, Germany,
Italy, Belgium, Netherlands, Luxemburg, Spain, Sweden) |
|
|
Americas,
Africa |
Not finalized(1) |
USA |
|
Finalized(5) |
Canada,
Mexico, South Africa, Brazil, Argentina |
IMPLEMENTATION OF BASEL III
The FSC, in close coordination with the MOSF, FSS, BOK, and other relevant authorities, came to a decision to implement Basel III on December 1, 2013. The decision was made as major Asian economies have already implemented Basel III capital regulations in 2013 and the banking industry requires time to prepare for the adoption.
EXPECTED EFFECTS
The Basel III regulation to take effect this year will be limited to bank capital requirements. Since the capital of most domestic banks consists of common equity, the impact of Basel III capital regulations will not be significant unlike banks in the US and Europe.
FUTURE PLAN
The authorities will gather additional opinions on the revisions to the ‘Regulation on Supervision of Banking Institutions’ and ‘Enforcement Rules for Banking Supervision’ from May 31 to June 19, 2013. Final decision will be made by the FSC in June.
<Basel I, II, III Comparison>
|
Region |
Implementation Schedule |
Member Countries |
|
Asia |
Not finalized(2) |
Korea, Indonesia |
|
Finalized(7) |
Japan, Singapore, Hong
Kong, China, India, Saudi Arabia, Australia |
|
|
Europe |
Not finalized(1) |
Turkey |
|
Finalized(11) |
Switzerland, Russia, EU(UK, France, Germany,
Italy, Belgium, Netherlands, Luxemburg, Spain, Sweden) |
|
|
Americas,
Africa |
Not finalized(1) |
USA |
|
Finalized(5) |
Canada,
Mexico, South Africa, Brazil, Argentina |
<Basel III Implementation Schedule>
|
|
’11 |
’12 |
’13 |
’14 |
’15 |
’16 |
’17 |
’18 |
’19 |
|
▪ Minimum Common Equity Capital Ratio (A) |
|
|
3.5 |
4.0 |
4.5 |
4.5 |
4.5 |
4.5 |
4.5 |
|
▪ Capital
Conservation Buffer (B) |
|
|
|
|
|
0.625 |
1.25 |
1.875 |
2.50 |
|
- Minimum Common
Equity Plus Capital Conservation Buffer(A+B) |
|
|
3.5 |
4.0 |
4.5 |
5.125 |
5.75 |
6.375 |
7.0 |
|
▪
Minimum Tier 1 Capital |
|
|
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 |
|
- Minimum Total Capital Plus Conservation Buffer
(B+C) |
|
|
8.0 |
8.0 |
8.0 |
8.625 |
9.25 |
9.875 |
10.5 |
|
Leverage Ratio (Tier 1 –
3%) |
Supervisory monitoring |
Parallel run Discloser starts 1 Jan, 2015 |
Revision |
Introduce minimum standard |
|
|
LCR (≥100%) |
Observation period |
60 |
70 |
80 |
90 |
100 |
|
|
NSFR (≥100%) |
|
Observation period |
Introduce minimum standard |
|
|||
*Please read the attached file for details.