SEOUL (Reuters ) - South Korea's central bank, and its financial regulator, announced on Monday that they will voluntarily participate in a global stress testing of banks. They hope to benefit from a thorough assessment of the risks they face at an international level.
In a joint press release, the Bank of Korea and Financial Supervisory Service announced that the country had decided to participate in the test conducted by the Financial Stability Board (FSB) and Basel Committee on Banking Supervision.
In order to analyse and compare data from different countries, each country must submit their own bank information.
The South Korean agencies stated that the program would allow the participating countries to assess the financial stability of the world at a global scale, including the effects of contagion due to global interconnection.
South Korea does not have to participate in the test because none of its banks is classified as a globally systemically important bank, but it is interested in monitoring global contagion risk.