Indonesia Imposes Extra Capital Requirements on Top Banks
- Lenders face surcharge of 1%-3.5% of risk-weighted assets
- Buffer to act as cushion against potential collapse, losses
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Indonesia ordered the nation’s biggest lenders to set aside additional capital to bolster their ability to absorb losses and protect against any bank failures.
The Financial Services Authority, known as OJK, told the country’s systemically important banks to create a tier-1 capital surcharge of between 1 percent and 3.5 percent of risk-weighted assets, depending on the size and perceived riskiness of the lender, the regulator said in a statement on its website Tuesday. Banks have until Jan. 1 to meet the additional requirement, it said.