MAS supports global agreement on higher minimum capital standards

The new agreements will enhance global capital standards, promote a more resilient banking sector and support global economic growth.

The Monetary Authority of Singapore (MAS) supports the global agreement announced by the oversight body of the Basel Committee on Banking Supervision (BCBS) or Group of Governors and Heads of Supervision (GHOS) on 12 September 2010 to strengthen and raise global capital standards.

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, according to a MAS announcement.

MAS added it will review its capital standards in consultation with industry and revise its current requirements if necessary.

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.”