South Korean banks will adopt new global rules on management and supervision of interest rate risk next year, the nation's financial watchdog said Thursday.
The so-called Interest Rate Risk in the Banking Book (IRRBB) capital requirements were introduced by the Basel Committee on Banking Supervision in 2016 to help banks better measure and control interest rate risk.
The new rules will replace the Basel Committee's 2004 rules on management and supervision of rate risk.
In a statement, the Financial Supervisory Service said it has been working with local banks to adopt the new rules in the middle of next year.
The new rules are expected to help banks better calculate rate risk under prescribed scenarios, the FSS said.
Under the new rules, local banks are expected to hold adequate capital and make the local banking system more stable, the FSS said. (Yonhap)