The BIS capital adequacy ratio of domestic banks as of the end of June this year averaged 11.00%, continuing a modestly downward movement that began after reaching 11.68% at the end of 2001. Rising risk-weighted assets relative to bank capital most likely contributed to the drop in the BIS capital ratio. But the end-of-June average is higher than 10.82% at the end of March and suggests the BIS capital ratio will continue to move within a narrow range. The jump in the second quarter was helped by a slowing pace of risk-weighted assets and bank capital increases totaling 2.268 trillion won.

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