MAS Supports Global Agreement on Higher Minimum Capital Standards
Singapore, 13 September 2010…The Monetary Authority of Singapore (MAS) supports the global agreement announced by the Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision (BCBS), on 12 September 2010 to strengthen and raise global capital standards.
2 The new agreements reached by the GHOS finalise the global minimum capital standards and transitional arrangements to implement these new standards. These agreements will enhance global capital standards, promote a more resilient banking sector and support global economic growth. The announced package of reforms includes higher global minimum requirements for common equity and Tier 1 capital based on stricter criteria; and a new capital conservation buffer which will be imposed above the common equity regulatory minimum to absorb losses during periods of financial and economic stress.
3 As members of both the GHOS and the BCBS, MAS has been contributing to these international discussions to enhance the global capital framework and is committed to uphold and implement these standards. Singapore-incorporated banks which have been subject to MAS’ conservative capital requirements are well-capitalised and are adequately placed to meet these new global standards. MAS will review our capital standards in consultation with industry and if necessary, revise our current requirements.
4 Heng Swee Keat, MAS’ Managing Director, said, “MAS has always implemented more conservative capital requirements than Basel standards. MAS welcomes these new higher standards and the stricter definition of capital which represent a significant strengthening of global capital standards. These new capital rules, together with enhanced risk coverage, the introduction of a global liquidity standard and continued appropriate supervisory intensity will improve the resilience of the financial sector. The careful transition to the new standards will help support the global economic recovery.”