Banking rules set new capital adequacy ratios

New stringent banking requirements may affect the operational and fund-raising modes of domestic lenders in the short-term, but they will help stabilise the development of the banking market.

On May 3, the China Banking Regulatory Commission (CBRC) released new capital requirement regulations that reflect the regulator's toughened stance on minimising risks during the country's credit expansion. The Guiding Opinion on the Implementation of New Regulatory Standards by China's Banking Sector (关于中国银行业实施新监管标准的指导意见), which takes effect on January 1 2012, is based on the requirements set forth in the Basel II and Basel III agreements and brings China more in line with international standards.