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FSC enhances South Korean banks' soundness with 1% capital buffer rule

South Korea's Financial Services Commission (FSC) has announced a 1% countercyclical capital buffer (CCyB) requirement for banks and their holding companies, effective from May next year. The move is designed to enhance banks' ability to absorb losses amid escalating macroeconomic uncertainties and financial risks. Since its introduction in 2016, the CCyB ratio has remained at zero. The FSC confirmed that all South Korean banks already possess sufficient capital for this adjustment and have ample capability to procure additional capital. The regulatory body asserts that this measure is targeted at bolstering the perceived soundness and credibility of the nation's banking institutions.


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