South Korea: South Korean banks saw their capital adequacy ratio inch up in the first quarter of the year, data showed Thursday. The average capital adequacy ratio of 17 commercial and state-run banks stood at 15.68 percent as of end-March, up from 15.60 percent three months earlier.
According to Yonhap News Agency, the preliminary data from the Financial Supervisory Service (FSS) highlighted this increase. The capital adequacy ratio is a key barometer of financial soundness, measuring the proportion of a bank's capital to its risk-weighted assets.
The Switzerland-based Bank for International Settlements (BIS), an international organization of central banks, advises lenders to maintain a ratio of 10 percent or higher. This advisory serves as a benchmark for banks globally to ensure they have enough capital to absorb a reasonable amount of loss and are complying with statutory capital requirements.