China Banking Regulatory Commission, Guiding Opinion on the Implementation of New Regulatory Standards by China's Banking Sector

(ii) the countercyclical capital regulatory framework is introduced, including a capital conservation buffer of 2.5% and a countercyclical capital buffer of 0-2.5%; and

(iii) the requirement on the supplementary capital of systemically important banks is enhanced to 1% (provisionally).

Upon the implementation of the new standards, the capital adequacy ratios of systemically important banks and non-systemically important banks under normal circumstances shall at least be 11.5% and 10.5% respectively. Where there is systematic excess credit growth, commercial banks shall make provisions for a countercyclical capital buffer.

- Introducing the leverage ratio regulatory standard, i.e. Tier 1 capital shall account for no less than 4% of the balance of the assets on and off balance sheet (after adjustments).

- Establishing a multi-dimensional liquidity risk regulatory standard and monitoring metrics system. Both the liquidity coverage ratio and net stable funding ratio may not be less than 100%.

- Having at least 2.5% of a bank's total loans as well as 150% of its non-performing loans set aside as provisions.

Systemically important banks shall meet the said new requirements by the end of 2013, while individual banking financial institutions with relatively lower profitability and relatively frequent additional provisions for loan loss may meet the requirements by the end of 2018 (Article 3).