SEOUL, Nov 11 (Reuters) - South Korean banks' capital ratio fell to the lowest in seven and a half years due to investment losses sparked by the global financial turmoil and an increase in risky assets, the financial regulator said on Tuesday. The Financial Supervisory Service (FSS) said it would encourage banks to boost their capital and increase profits retained. It also called for banks to prepare for a possible rise in bad debt amid the economic downturn. The capital adequacy ratio guided by the Bank for International Settlements (BIS), a measure of banks' financial soundness, fell to 10.79 percent at the end of September, down from 11.36 percent at end-June, the FSS said. It was the lowest reading for the quarterly data since end-March, 2001. At the end of 2007, the ratio stood at 12.31 percent. Separate FSS data showed...
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