Harsh Basel III capital requirements stifling South Korean banks’ growth
South Korean banks seek to further optimise their portfolios in the face of rising NPL ratios and tough Basel III capital requirements. December 13, 2012 | Baron LaudermilkA recently conducted survey at The Asian Banker’s Risk Management Roundtable 2012 in South Korea revealed three key problems faced by South Korean banks’ risk management departments – complying with Basel III regulations, increasing their capital buffers, and optimising their portfolios, with the domestic and international economy still recovering from the 2008 global financial crisis. The survey consisted of 11 South Korean Banks, including: Shinhan Bank, Suhyup Bank, Woori Bank, Busan Bank, Citi Bank, Dauga Bank, Hana Bank, Industrial Bank of Korea, Jeonbuk Bank, Kookmin Bank, and Kyungnam Bank. Only one question was asked, “What is the largest challenge faced by your risk management department right now?” Each risk management officer was offered the opportunity to explain their problems, ways in which they have approached these problems, and possible solutions to them. Below are the results: South Korean banks stifled by burgeoning challenges Figure 1. Challenges facing South Korean banks’ risk management departments
Complying with Basel III regulations The largest challenge faced by South Korean banks are in fulfilling all Basel III requirements and ensuring compliance by the time the rules are enforced next year. This seems to contradict popular belief, with observers of the opinion that South Korean banks do not face many challenges in complying with Basel III regulations. They have had good reason to believe this is true, with all three major rating agencies in the country (Standard & Poor's, Moody's and Fitch Ratings) having raised banks’ rankings in the last year, indicating smooth implementation of Basel III regulations. In fact, Standard & Poor’s has said that it might again raise South Korea’s credit rating if its strong economic performa... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Basel III, Operational Risk, Risk and Regulation, South Koreabasel III,Oprisk,Risk and Regulation,south korea, Basel III,Operational Risk,Risk and Regulation,South Korea, Keywords:Market Risk, Shinhan Bank, Suhyup Bank, Woori Bank, Busan Bank, Citibank, Dauga Bank, Hana Bank, Industrial Bank Of Korea, Jeonbuk Bank, Kookmin Bank, Kyungnam Bank Market Risk, Shinhan Bank, Suhyup Bank, Woori Bank, Busan Bank, Citibank, Dauga Bank, Hana Bank, Industrial Bank of Korea, Jeonbuk Bank, Kookmin Bank, Kyungnam Bank
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