Capital adequacy ratio to be raised to 12.5% to meet Basel III accord: FSC.
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|
|Publication:||The Taiwan Economic News|
|Article Type:||Brief article|
|Date:||Nov 19, 2012|
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