SEOUL (Reuters) – South Korea will voluntarily join a global stress test on banks, hoping to gain from a thorough analysis of risks they face on an international level, the country’s central bank and its financial regulator said on Monday.
The Bank of Korea and the Financial Supervisory Service said in a joint statement that the country has decided to join the test led by the Financial Stability Board and the Basel Committee on Banking Supervision.
The test involves countries submitting data on their banks so that it can be analysed and compared on a global context.
“It will allow (the participating countries) to conduct an elaborate assessment of financial stability on a global level such as contagion effects due to the global interconnection,” the South Korean agencies said.
South Korea is not required to join the test as none of its banks are classified as globally systemically important banks, but is keen on monitoring global contagion risks.
(Reporting by Choonsik Yoo; Editing by Muralikumar Anantharaman)