Konkuk University Medical Center and its ... - Korea IT Times

Conference
SaKong Il, Chairman of the Presidential
Committee for the G20 Seoul Summit (left) and
Kim Yuna
G20 Sherpa Meeting
for Economic Cooperation and Development (OECD), World Trade Organization(WTO),
Financial Stability Board (FSB)
Bank stability is financial stability
According to Bloomberg, the latest statement of the Financial Stability Board has
warned that the big banks, with the new rules, will be required to meet higher capital standards.
That has turned the spotlight to the G20 Seoul Summit to further addresses to the
big banks. Financial Stability Board Chairman Mario Draghi stressed the importance of a
strong financial system with higher capital standards, "We have a proper transition period
so that we don't risk hampering the economy." G20 leaders established FSB in 2009 to
coordinate the work of national regulators and international standard setting agencies.
This year in the capital city of South Korea, FSB is expected to make proposals based on
their study on capital surcharges, contingent capital, and bailed-in assets, to suggest a possible
solution for the largest lenders. Basel Committee on Banking Supervision, or regulators
of the 25 nations, has already reached an agreement on new rules (more than double capital requirements for banks, while giving
them maximum of eight years to comply in full). These proposals will force lenders to have common equity equal to at least 7 percent
of assets, weighted according to their risk, including a 2.5 percent buffer to withstand future stress. Banks that fail to meet the buffer
would be unable to pay dividends, though they wouldn't be forced to raise cash. Lenders will have less than five years to comply with
the minimum ratios and until Jan. 1, 2019, to meet the buffer requirements.
G20, Can you handle collapsing banks?
The Lehman Brothers' nightmare should never return in any country. Global policymakers in November are expected to suggest
ways to ensure the stability of the big banks. Before the summit, the Group of 20 members will endorse a range of options such as the
use of capital surcharges on big banks, and the need for each country to set up effective resolution authorities.
G20 set to grow economy
President Lee Myung-bak stated, "During the Toronto G20 Summit last June, the leaders agreed to reach an agreement on many of
the important topics during the G20 Seoul Summit in November. We promised to do all that we can to bring about workable and substantive
agreements on issues such as reform of international financial institutions, financial regulatory reform and balanced and sustainable
growth, among others. Furthermore, we seek to achieve progress in topics of global interest, including the global Financial
Safety Net and the issue of development." Sa Kong Il, Chairman of the Presidential Committee for the G20 Seoul Summit, added
"Asia's enhanced economic status provides us with an opportunity to rebuild and reconsider Asia's role and position in the context of
global governance."
Chun Go-eun/ clairbear@koreaittimes.com
www.koreaittimes.com 15