SINGAPORE, June 28, 2011 (AFP) - Singapore on Tuesday announced it will introduce new banking rules tougher than international standards designed to cushion the effects of future financial crises.
The Monetary Authority of Singapore (MAS) said regulations that will require four locally incorporated banks to raise their capital adequacy ratios would be progressively phased in from 2013.
By January 1, 2015, the banks must meet a minimum capital adequacy ratio (CAR) of 6.5 percent, 2.0 percent higher than Basel III banking standards.
The Basel Committee in September last year proposed new rules aimed at shoring up banks' against another meltdown that led to the 2008-2009 global recession.
Known as Basel III, the rules are scheduled to be introduced from 2013 with banks asked to hold higher reserves by January 1, 2015.
The MAS said in a statement that two higher levels -- Tier 1 CAR of 8.0 percent and total CAR at 10 percent, both 2.0 percent higher than Basel III, will also be used.
MAS deputy chairman and trade minister Lim Hng Kiang said the hike was consistent with Singapore's "high standards of financial regulation."
"Maintaining high regulatory standards is completely compatible with fostering a vibrant financial sector," he said.