China to expand financing avenues for banks

China is expected to open new channels for banks to raise capital in a series of regulatory changes aimed at boosting credit growth and helping banks to meet higher capital requirements, Market Watch reported, citing Shanghai Security News. Under the new rules, banks may be able to issue preferred stock and raise funds in the secondary market. Since the financial crisis in 2008, regulators have raised the minimum capital adequacy ratio (the percentage of a bank’s equity and retained profits versus its risky assets) to 11.5% for systematically important banks and 10.5% for other lenders. The new rules were scheduled to be put in action from the start of 2012, but were delayed due to the fragile state of the world economy. They are however expected to be enforced from early next year.