Singapore c.bank imposes tougher capital rules than Basel III

SINGAPORE, June 28 (Reuters) - Singapore is to make its banks hold higher capital levels than those set out under the new Basel III rules, the deputy chairman of the city-state's central bank said on Tuesday.

The Monetary Authority of Singapore (MAS) intends to make its local banks hold a common equity tier one ratio of 6.5 percent as well as a conservation buffer of 2.5 percent, making a total requirement of 9.0 percent. That is two percentage points above the Basel III rules which requires banks to hold a total of 7.0 percent in common equity.

In total the banks will have to hold a total of 8.0 percent in tier one capital excluding the conservation buffer, up from the previous requirement of 6.0 percent.

"We must maintain the high standards of financial regulations which have become associated with Singapore," Lim Hng Kiang, minister for trade and industry and deputy chairman of the MAS, said during a speech.

The Basel III rules were drawn up following the financial crisis, with the capital regulations aimed at ensuring banks are better positioned to withstand unexpected losses. (Reporting by Rachel Armstrong, Kevin Lim and Saeed Azhar)