The Bank of Korea’s (BoK) proactive risk assessments and strengthened capital requirements have fortified the financial system, with commercial banks demonstrating robust metrics with 18% capital adequacy ratio and 111% liquidity coverage ratio as of October 2023.

Accepting the award for Best Systemic and Prudential Regulator in Asia Pacific, chief representative Lee Mingyu said: “This accolade is a testament to the dedication and efforts in ensuring the stability of Korea’s financial system.”

Over the past year, BoK conducted rigorous risk assessments across banks and non-bank deposit-taking institutions (NBDIs), focusing on funding and operational resilience in response to interest rate hikes. By the end of the third quarter of 2023, commercial banks had prudently allocated sufficient loan loss provisions and reserves, although NBDIs required reinforced loss absorption capacities.

The bank raised the countercyclical capital buffer requirement for banks and bank holding groups from 0% to 1% of total risk-weighted assets, effective May 2024, to strengthen systemic resilience.

Mingyu said: “On behalf of governor Chang Yong Rhee, I would like to express my sincere appreciation to The Asian Banker, and the International Council of Advisors for acknowledging our efforts, and to the Korean financial authorities for their collaboration and support.”