The relevant risk scenario assumes a marked flattening of the yield curve (decline of 55 basis points in the spread between the three-month interest rate and the yield in ten-year Bunds) and a severe economic slump (4% decline in GDP). In the current economic situation, this is undoubtedly a very sceptical assumption.
As indicated in our guidelines, qualified banks are rural banks, thrift banks or coop banks in areas affected by typhoons, disasters and other natural calamities – as declared by the Office of the President or the National Disaster Coordinating Council.