CBRC could hike capital adequacy requirements in 2011

The China Banking Regulatory Commission (CBRC) plans to increase capital adequacy ratio (CAR) requirements for banks under new rules likely to be released next year, Reuters reported, citing state media. A report in China Business News quoted an unidentified source as saying the CBRC would require large banks to increase their CAR to 11%, while smaller banks would have a minimum requirement of 10%. At present, China’s banks are required to have a CAR of no less than 8%. The new rules would permit regulators to increase a bank’s CAR by an additional 5 percentage points, and would set leverage ratios to require that banks’ core capital is at least 4% of total assets. No specific date was given for the introduction of the new rules.