Korea to take part in global stress test on banks

Customers conduct banking at a bank counter in Seoul in January. [YONHAP]

Korea is conducting a global stress test to verify the soundness of domestic banks.

The Bank of Korea and Financial Supervisory Service (FSS) said Monday they are taking part in the Global Stress Test led by the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB) from this week through June.

The test aims to calculate changes in banks’ capital ratio by country, measure the contagion effects amongst countries and compare results, said the central bank.

The global stress test comes amid heightened risks in the financial sector due to monetary tightening in major economies and a global economic slowdown.

The central bank said the test will help improve the banking sector's financial stability.

BY JIN MIN-JI, YONHAP [jin.minji@joongang.co.kr]