Financial Regulatory Forum

China shadow banking: dancing in the dark

By Helen H. Chan

HONG KONG/NEW YORK, Feb. 8 (Business Law Currents) – Uncertainty over the exact size of China’s underground private financing activities, also known as the shadow banking industry, is causing concerns among international investors as well as the Chinese government.

Restrictions on bank lending to China’s small-to-medium enterprises and to the real estate sector over the past few years have driven many of these businesses to seek alternative methods of financing from larger cash-rich entities. This demand for funding has in turn prompted the development of non-bank financiers such as trust companies and private short-term financing service providers. (more…)

Basel III: Chinese banks saving for new capital adequacy ratio

By Helen H. Chan

HONG KONG, Aug. 26 (Business Law Currents) – New capital adequacy rules from the China Banking Regulatory Commission (CBRC) are prompting banks to hit up investors in Hong Kong and Shanghai’s capital markets. Part of the Basel III implementation process, the rules will require Chinese lenders to shore up additional capital to protect against credit risks.

Under the new rules, which are currently open to public review, systemically important banks in China will be subject to a minimum capital adequacy ratio (CAR) of 11.5 percent; other banking institutions will be required to adhere to a minimum CAR of 10.5 percent.


China bank chief gets tough on property, land loans

CHINA   By Langi Chiang and David Stanway
   BOAO, China, April 11 (Reuters) – China’s banks must report on the quality of their loan books by the end of June and take fresh steps to rein in risky lending to land developers, the chief banking regulator said on Sunday. (more…)

EXCLUSIVE – China tells banks to ensure loans are used properly

SHANGHAI, Feb 1 (Reuters) – China’s banking regulator has ordered lenders to conduct checks on whether any of their loans have illegally gone into the stock or property markets, a banking source told Reuters on Monday, the latest step in a clampdown on excessive lending and rising asset prices.

Credit found used for improper purposes must be withdrawn within a certain period of time, said the source, who had seen the relevant notice from the regulator. He did not elaborate on the timeframe.

The order from the China Banking Regulatory Commission (CBRC) marks further efforts by Beijing to rein in rampant lending and ensure that credit is being used to generate genuine economic activity and not simply to fuel speculation in stocks and property.

China tells some banks to halt new business-report

drc    BEIJING, Sept 3 (Reuters) – China’s banking regulator is refusing to allow banks with a capital adequacy ratio below 9 percent to start new lines of business or open new branches, a government researcher said in remarks published on Thursday.

China may tighten banks’ capital rules – sources

CHINA   SHANGHAI, Aug 3 (Reuters) – China’s banking regulator, concerned record lending could lead to a spike in bad loans, may tighten banks’ capital rules by excluding subordinated bonds they sell to other banks from their capital base, sources said Monday.

In China, banks chafe at derivatives drive

By Eadie Chen and Jonathan Leff
BEIJING/SINGAPORE, July 27 (Reuters) – While Washington pursues a high-profile overhaul of its derivatives markets, a more modest but equally important crackdown is underway in China. (more…)

China tells banks to ensure loans enter real economy

BEIJING, July 27 (Reuters) – Chinese banks must ensure that loans they issue for investment projects are actually being put to use in the real economy, the country’s banking regulator said on Monday.