Banks in Korea have been engaging in robust issues of securities after the nation's timeline for adopting Basel III was postponed.
Korea's Financial Services Commission announced late last year that it had decided to change its timeline for implementing its interpretation of the capital guidelines provided by the Basel Committee on Banking Supervision. The organization stated at the time that it was interested in observing how other nations coped with the capital requirements.
As a result of this decision to delay the schedule for putting Basel III in place, many banks in Korea have been selling significant amounts of securities that are compliant with the old Basel II regime, according to a Fitch Ratings.
The credit ratings agency noted several different reasons why these lenders have been able to sustain this activity. These banks have benefited from the wide range of investors in the Asian nation that have displayed a demand for these securities.
These financial institutions have also been making use of the borrowing costs that come along with securities that count toward the Basel II requirements, realizing that these expenses will probably be higher for bonds that are compliant with Basel III.
◦ Asset Liability Management
◦ Portfolio Risk
◦ Sensitivities & Hedging
◦ Stress Testing & Scenario Analysis