Basel III capital adequacy applies to Kuwaiti banks - Hashel [Kuwait News Agency]
(Kuwait News Agency Via Acquire Media NewsEdge) | By Fawaz Karami KUWAIT, Feb 1 (KUNA) -- Central Bank of Kuwait (CBK) Governor Dr. Mohammad Al-Hashel said here on Saturday the CBK board of directors has approved the application of the Basel III capital adequacy standards to Kuwaiti banks.
The Basel III capital adequacy standards include key amendments to the Basel II standards, primarily an increase in the total ratio of the regulatory capital and a redefinition of the regulatory capital as part of a package of criteria targeting quality improvement, he said in an exclusive interview to KUNA.
They also involve minimum common equity, conservation capital buffer and countercyclical capital buffer, set out stricter conditions and terms for the second capital slash, and scrap the third capital batch of the Basel II, together with additional ratios for domestically systematic important banks (DSIBs), he added.
The Basel III reform package further provides for applying other standards such as average ratio, liquidity coverage ratio and net stable founding ratio, Al-Hashel said.
The changes introduced by the Basel Committee on Basel Supervision (BCBS) to the Basel II capital adequacy standard are mainly intended to improve capital quality and boost regulatory capital in order to make up for losses, as well as build conservation capital buffer, he said.
The CBK has taken necessary measures to put Basel III standards in place out of its interest in the significance of international reform packages, the governor of the CBK pointed out.
Kuwait was in the forefront of those countries which applied the Basel II standard, having received welcome and appreciation from international financial and banking institutions, he boasted.
The CBK board of directors has approved a minimum capital adequacy ratio of 13 percent with phased-out application; 12 percent in 2014, 12.5 percent in 2015 and 13 percent in 2016, he added.
Kuwaiti banks are scheduled to provide the CBK with capital adequacy data as of December 2013, Al-Hashel said.
The CBK is continuously seeking to revamp its regulatory tools in line with standards issued in order to ensure better practices and bank resilience in face of jolts in line with a balanced and phased-out approach based on regulatory policies, the CBK governorconcluded. (end) fnk.ysa.mt KUNA 011712 Feb 14NNNN
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