Ten Systemically Important Banks and Holding Companies Selected in 2021... Jeju Bank Excluded

[Asia Economy Reporter Kim Hyo-jin] On the 24th, the Financial Services Commission held a regular meeting and selected five bank holding companies?Shinhan, Hana, KB, Woori, and NongHyup Financial Group?and five banks?Shinhan, Hana, Kookmin, Woori, and NongHyup Bank?as systemically important banks and bank holding companies (D-SIB) for 2021.

Compared to this year, Jeju Bank was excluded. The Financial Services Commission explained, "In accordance with the financial regulatory flexibility measures in response to COVID-19, small regional banks were excluded from the D-SIB selection and exempted from the additional capital accumulation requirement (1 percentage point)."

The D-SIBs selected this time will be subject to an additional capital accumulation requirement of 1 percentage point during 2021.

The Basel Committee has been promoting strengthened supervision of large banks and bank holding companies to address systemic risks posed by large financial institutions. Accordingly, the Financial Stability Board (FSB) selects global D-SIBs and imposes additional capital accumulation requirements ranging from 1% to 3.5% based on their importance.

The Basel Committee also recommends that financial authorities select domestic D-SIBs and encourage additional capital accumulation for the respective banks and bank holding companies.

Following the Basel Committee's recommendations, the Financial Services Commission has been selecting D-SIBs since 2016.

Korea Development Bank and Industrial Bank of Korea are public institutions in which the government holds shares and have government loss compensation clauses, so they are excluded from D-SIB.

This content was produced with the assistance of AI translation services.