Thailand’s large banks should all be able to comply with new capital requirements for domestic systemically important banks (D-SIB) deemed “too big to fail”, said Fitch Ratings.
The banks named as D-SIBs all have capital ratios that are well above the new minimum requirements that will be phased in by 2020, Fitch said in a statement on Friday.
The D-SIB framework, announced by the Bank of Thailand (BoT) on September 25, is a step towards full implementation of international regulations, Basel III, that impose more stringent capital requirements on banks that could have large negative effects on the financial system in the event of their failure or impairment.
The five largest commercial banks, which have market shares of 10 per cent to 16 per cent of consolidated assets, have been classified as D-SIBs, which is in line with market expectations, said Fitch. The sixth-largest bank has a market share of only around 5 per cent.
The selection of these banks was in line with Basel recommendations, and took into account their size, interconnectedness, substitutability and complexity, said Fitch Ratings.