China won't postpone capital requirements for commercial lenders

Updated: 2012-11-20 20:54

By Wang Xiaotian (chinadaily.com.cn)

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China will not follow some economies to postpone implementation of tougher capital requirements for commercial lenders, which are based on the newest global regulatory standards, said a senior official on Tuesday.

Wang Zhaoxing, vice-chairman of the China Banking Regulatory Commission, said at a forum in Beijing that China will not follow major economies, such as the United States and Europe, to consider putting off the implementation of tougher criteria.

"China has promised to positively anticipate the global financial supervision framework and implement international standards. More importantly, we already took the domestic situation and our own development needs into consideration when we drafted the rules," Wang said.

He said regulators wish to improve the banks' risk management capabilities, and encourage banks to optimize their business structures.

"(The new rules) will be a Chinese version of capital criteria, tailored to Chinese banks' balance sheet structures, risk features, and business models," Wang said.

The CBRC also expects the new rules to make banks more determined to improve capital quality, by encouraging them to put aside more profits as capital, and to develop new tools to supplement capital.

Wang said the regulators will soon release guidelines to encourage innovation by banks on developing capital instruments to help them replenish capital, probably by the end of the year.

The State Council said in June that the new rules, which will set tougher criteria for lenders' capital adequacy levels, will take effect at the beginning of 2013.

The new requirements are in line with the Basel II and Basel III agreements, set by the Basel Committee on Banking Supervision, a global group of central bank governors, on bank capital adequacy and liquidity.

Beijing initially planned to put the new rules into effect at the beginning of this year to better contain risks generated as a result of large-scale lending during the financial crisis, but later postponed their implementation.

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