Comments on: Basel III: Chinese banks saving for new capital adequacy ratio Mon, 31 Oct 2016 15:40:16 +0000 hourly 1 By: GeorgeLekatis Wed, 09 Nov 2011 17:54:21 +0000 On 15 August 2011 the China Banking Regulatory Commission (CBRC) released new draft guidelines regarding commercial banks’ capital requirements.

The draft guidelines set out how China aims to comply with the higher capital standards set by Basel III.

The draft guidelines set out the new, layered, capital adequacy requirements:

1. “Minimum capital requirements” for all banks: Tier 1 capital adequacy requirement of 6% (of risk weighted assets), of which 5 percentage points must be “core” Tier 1 capital; and combined Tier 1 and 2 capital adequacy ratio of 8% (of risk weighted assets)

2. In addition all banks will be required to keep a “capital conservation buffer” of 2.5%

3. systemically important banks are required to hold an additional 1% of capital; that gives a total minimum capital adequacy ratio under “normal conditions” of 11.5% for systemically important banks, and 10.5% for non-systemically important banks

4. In addition the regulator will impose an additional “countercyclical buffer” of between 0 – 2.5% during times of excessive credit growth.

George Lekatis

By: TheSteelGeneraI Thu, 01 Sep 2011 01:02:55 +0000 Shouldn’t we talk about the CAR of Western banks, which is still THREE percent?