1. Reasons for Modification

□ The Basel Committee on Banking Supervision (BCBS) has amended leverage ratio (tangible common equity ratio) regulations and accordingly, it is necessary to reflect and implement the amendments in Korean regulations to enhance the international integrity of the supervision system and improve the bank capital management system.

2. Details of Changes in Provisions

□ Amend the total exposure calculation for tangible common equity ratios (Detailed Regulations on Supervision of Banking Business <Table 3-8>, Detailed Supervisory Regulations on Financial Holding Companies <Table 1-3>).

◦ Grant supervisory authorities the discretionary power to exclude central bank reserves from exposure calculations in order to allow banks to supply credit even in crisis situations.

◦ Change the exposure calculation method for derivatives to the standard method for counterparty credit risk, and otherwise clarify specific calculation standards.

◦ Clarify the criteria for applying credit conversion factors when calculating the exposure of off-balance sheet items.

◦ Apply a rate of 100% if a credit conversion factor has not been defined, and simplify the maturity-based credit conversion factor.

◦ Add the average balance of securities financing transactions to the list of publicly disclosed information.

□ Modify business report and management disclosure forms for banks and bank holding companies (Forms 57 and 120 of the Detailed Regulations on Supervision of Banking Business, Detailed Supervisory Regulations on Financial Holding Companies <Form 18>).

◦ Amend business report and management disclosure forms to reflect amendments to the Detailed Regulations on Supervision of Banking Business <Table 3-8>.