Following the inadequacies in the OCBC response to SMS phishing scams in December 2021, the Monetary Authority of Singapore (MAS) has imposed additional capital requirements on OCBC. OCBC is now required to apply a multiplier of 1.3x to its risk-weighted assets for operational risk, which amounts to approximately S$330 million in capital, according to its most recent financial results. This regulation comes after reviews conducted by an independent firm hired by OCBC and MAS, revealed weaknesses in the bank’s standard operating procedures, contributing to the magnitude of the scam. Nevertheless, once all the deficiencies identified in the review are fully addressed, this additional capital requirement will be removed. In the meantime, you might be wondering if this has any severe implications for OCBC. What is capital requirement? Let us first understand what this capital requirement entails. In a nutshell, capital requirements are regulatory rules that ensure banks have enough capital to sustain operating losses....