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China Bank Regulator Issues New Banking Regulations Under Basel III

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BEIJING -(Dow Jones)- China’s bank regulator on Tuesday issued new regulations to bring management of the country’s banking system in line with the Basel III requirements.

Systemically important financial institutions will have to comply with a minimum capital adequacy ratio of 11.5%, while non-systemically important financial institutions will face a capital adequacy ratio of 10.5%, the China Banking Regulatory Commission said in a statement.

Under current regulations, “large” banks are already required to have an 11.5% capital adequacy ratio, while “small and medium-sized” banks must have a capital adequacy ratio of 10.0%, but the banks are not divided according to systematic importance, according to the CBRC statement.

The new regulations will begin to be implemented in 2012 and banks will be expected to meet the requirements by 2016, two years ahead of the Basel III schedule, the CBRC said.

-By Aaron Back, Owen Fletcher and Stefanie Qi, Dow Jones Newswires; (8610) 8400-7701; aaron.back@dowjones.com

Written by psudra2001

May 10, 2011 at 3:15 pm

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