SHANGHAI (Reuters) - China's banking regulator plans to introduce a new set of supervisory rules next year to make sure that lenders have adequate capital, provisions and liquidity to cope with potential risks, the China Business News reported on Monday, citing an unidentified source.
The China Banking Regulatory Commission (CBRC) will require that banks of systematic importance must have capital adequacy ratio (CAR) of at least 11 percent, while the minimum set for the other lenders is 10 percent, the newspaper said.
In addition, regulators can urge lenders to further increase their CAR by as much as 5 percentage points, the article said. Currently, banks are required by rules to have CAR of at least 8 percent, although in reality, listed banks are subject to tougher criteria.
CBRC will also set leverage ratios for banks, requiring that lenders have core capital that reaches or exceeds 4 percent of total assets, the newspaper said.
Banks must also set aside provisions of at least 150 percent of bad debts and 2.5 percent of total loans outstanding, the article said, while lenders' high-quality liquid assets must exceed their net cash outflows during the NEXT (NXT.LO)30 days.
The newspaper said the rules are under discussion and will be implemented in 2011.
According to the agreement reached by global regulators and central bankers on Sunday, known as "Basel III," banks will have to more than triple to 7 percent of the amount of top quality capital they hold to withstand future shocks.
(Reporting by Samuel Shen and Farah Master; Editing by Ken Wills)
