FSC and FSS to Adopt Basel III Credit Risk Framework in June 2020
FSC and FSS announced their plans for the early adoption of the credit risk framework in Basel III. The announced adoption timeline of late June this year is more than one and a half year before January 01, 2022, which is the recommended adoption timeline by BCBS. The early adoption of the revised credit risk framework will begin gradually with domestic banks and bank holding companies. Additionally, changes to the calculation of operational risk capital will be implemented as scheduled in January 2022.
With the early adoption of Basel III rules, the government expects that banks with high proportions of business lending will see their BIS capital adequacy ratios increase, thus enabling banks to boost capital reserves to provide more funding to businesses. The government will finish revising the relevant rules and regulations in April, while providing assistance to financial companies to ensure that their system setup and verification are done smoothly. The government will continue to work on ways to ensure that the prudential regulations on financial institutions do not constrain their ability to respond flexibly in times of crisis.
Related Link: Press Release (PDF)
Keywords: Asia Pacific, Korea, Banking, Credit Risk, Basel III, Operational Risk, Standardized Approach, IRB Approach, BCBS, FSS, FSC
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
APRA Announces Deferral of Capital Reform ImplementationRelated Articles
BCBS Amends Guidelines on Sound Management of AML/CFT Risks
BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).
EBA Guidelines on Treatment of Structural Foreign Exchange Under CRR
EBA finalized the guidelines on treatment of structural foreign-exchange (FX) positions under Article 352(2) of the Capital Requirements Regulation (CRR).
FSB Issues Statement on Impact of COVID-19 Crisis on Benchmark Reform
FSB published a statement on the impact of COVID-19 pandemic on global benchmark transition.
IAIS Publishes List of Internationally Active Insurance Groups
IAIS published the list of Internationally Active Insurance Groups (IAIGs) publicly disclosed by group-wide supervisors.
FED Temporarily Revises FR Y-9C With Respect to PPPLF and CARES Act
FED has temporarily revised the reporting form on consolidated financial statements for holding companies (FR Y-9C; OMB No. 7100-0128).
EC Launches Consultation on Review of Solvency II Directive
EC launched a consultation on the review of the key elements of Solvency II Directive, with the comment period ending on October 21, 2020.
ECB Consults on Supervisory Approach to Consolidation in Banking
ECB launched a consultation on the guide that sets out supervisory approach to consolidation projects in the banking sector.
PRA Letter Sets Expectations on Approach to Managing Climate Risks
PRA published a letter that builds on the expectations set out in the supervisory statement (SS3/19) on enhancing banks' and insurers' approaches to managing the financial risks from climate change.
US Agencies Finalize Amendments to Swap Margin Rule
US Agencies (Farm Credit Administration, FDIC, FED, FHFA, and OCC) finalized changes to the swap margin rule to facilitate implementation of prudent risk management strategies at banks and other entities with significant swap activities.
IAIS on Package for 2020 Data Collection on ICS and Aggregation Method
IAIS published technical specifications, questionnaires, and templates for 2020 Insurance Capital Standard (ICS) and Aggregation Method data collections.
