CBRC: Banks Should Basically Rely on "Endogenous Capital" to Shore up Capital Positions12-07 18:19 Caijing
China's banking regulator has restrained the country's lenders from relying too much on issuance of shares, bonds and bills in replenishing capital in a guidance published on Friday, as it prepares for the adoption of new stricter capital rules known as Basel III in January 2013.
"Commercial banks should stick to the capital replenishing mechanism based on endogenous capital accumulation," the China Banking Regulatory Commission said in a statement published on its website, "while digging deeper into the research of the innovation on capital instruments and expanding the channels to replenish capital by issuing new capital instruments."
In another statement also issued today, the CBRC has given a six-year "transition period" before 2013 when all banks will be required to keep a "capital conservation buffer" of 2.5 percent: all banks will have to set aside 0.5 percent of extra capital as reserves by the end of 2013, and the ratio increases by 0.4 percent annually in the following five years.
Systemically important banks will have to meet minimum capital thresholds of 6.5 percent for core tier one capital ratio, 7.5 percent for tier 1 capital ratio and 9.5 percent for capital ratio, according to the statement. (Statement in Chinese)
Editors’ Picks »
- 1China Central Bank Withdraws Liquidity for Second Time in a Week
- 2Highlights: Premier Li's Government Work Report
- 3Chinese Regulators Vow Support for Internet Finance Products
- 4Last 3 Suspects Caught in Kunming Manhunt
- 5Jingdong Seeks Cornerstone Investors Ahead of IPO
- 6Japan’s Fast Retailing Surges in HK Debut
- 7HSBC, China Official PMI Drop for Third Consecutive Month in Feb.
- 8Yuan Among Most-Used Currencies
- 9CNOOC Licensed to Seek Arctic Oil
- 10Geely Buys British E-Car Startup