Korea Stiffens Liquidity Standard for Banks as Markets Recover
- Authorities will start exiting looser capital rules from July
- Regulators to maintain separate market stabilization program
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South Korea will ask its banks to hold more liquid assets, starting a gradual exit from regulatory easing on capital requirements as local markets recover from the pandemic and a recent credit crunch.
Authorities will begin normalizing rules for banks’ liquidity coverage ratio from July, the Financial Services Commission said in a statement Tuesday. The LCR ratio will be raised to 95% between July and December from 92.5% now, with the ratio for 2024 to be decided at the end of this year. Eased rules on the loan-to-deposit ratio will also normalize from next month.