Basel III won't directly impact Chinese banks
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New bank capital requirements rules, known as the Basel III, will not directly impact China's banking sector, Wang Huaqing, disciplinary commissioner of the country's banking regulator, said Thursday.
But with surging credit and tightening regulations, Chinese banks will face stricter rules on capital constraints and replenishment in the future, Wang added.
Basel III requires all banks to hold a capital conservation buffer of 2.5 percent, and maintain a core Tier 1 capital ratio of 4.5 percent, meaning banks must hold top-quality capital totaling 7 percent of their assets. According to Wang, top-quality capital currently accounts for nearly 80 percent of capital held by China's commercial banks.
China currently requires capital adequacy ratios of at least 11.5 percent for large banks, and 10 percent for small- and medium-sized banks, Wang said. His remarks came after China's banking regulator denied reports that it is planning to raise the capital adequacy ratio for large banks to 15 percent.
China's business press carried the story above on Friday. China.org.cn has not checked the stories and does not vouch for their accuracy.
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