The FSC approved revisions to the Regulation on Supervision of Banking Business including introduction of Liquidity Coverage Ratio(LCR) and changes to calculation of the ratio of Korean-won denominated loans to deposits.

KEY REVISIONS

1. Introduction of Liquidity Coverage Ratio(LCR)

The LCR rules will be implem ented starting from January 1, 2015. The minimum ratio for commercial banks will begin at 80%, which is higher than the Basel III requirement of 60%, given the current liquidity ratio of domestic banks. The ratio will be raised by 5%p per year over the next 4 years to meet 100% in 2019.

2. Revisions to calculation of Korean-won denominated loans-to-deposits(LTD) ratio

Policy loans will be exempted from the total amount of loans in calculating loans-to-deposits ratio in order to enhance banks’ capacity to lend and allow greater flexibility in banks’ asset management.

Covered bonds with a 5-year maturity or longer will be included the total amount of deposits in order to encourage the issuance of covered bonds and structural soundness of household debt.

The revised LTD rule will take effect immediately.

*Please refer to the attached file for details.