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Capital adequacy ratio to be raised to 12.5% to meet Basel III accord: FSC.

Taipei, Nov. 19, 2012 (CENS) -- Taiwan's Financial Supervisory Commission (FSC) will broadly revise rules regarding capital adequacy ratio to meet the Basel III Accord, which will be adopted starting January 2013.

The new rules stipulate the capital adequacy ratio of any domestic banks to be over 12.5% if they intend to reduce capitalization or set up branches and/or sub-branches on the island after January 2013.

Currently the capital adequacy ratio of domestic banks averages 11.97%, lower than the projected threshold of 12.5%.

FSC said that there are eight financial regulations relevant to capital adequacy ratio and only one regarding capital reduction that demands banks to raise capital adequacy ratio to 12.5% beginning next year, with the other seven not to take effect until 2019.

Currently the threshold of capital adequacy ratio of domestic banks is set at 8%-10%, which will be gradually raised beginning next year up to 12.5% by 2019; and the ratio of Tier 1 capital should be above 8.5% while the equity ratio of common shares above 7%.
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Title Annotation:Financial Supervisory Commission
Author:Li, Judy
Publication:The Taiwan Economic News
Article Type:Brief article
Geographic Code:9TAIW
Date:Nov 19, 2012
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