CBRC: Tougher capital rules needed for big lenders

15:47, December 29, 2010      

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With the evolution of China's financial markets, no doubt regulation will have to accommodate the changes as well. The head of China's banking regulator was quoted by the official China Securities Journal as saying tougher capital rules may be required for China's biggest lenders.

Liu Mingkang says higher capital adequacy ratio targets for big banks are required to build up counter-cyclical capital buffers in the banking system. Liu says the China Banking Regulatory Commission is currently studying new regulations for Chinese banks that are considered "too big to fail" - a phrase usually associated with American banks during the financial crisis.

He says the next step is to enhance precaution measures to prevent lenders from employing business structures that are overly complicated and to reduce the risk of moral hazard in the system.

Source: CNTV.cn
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