CBRC sets bank capital requirements

CHINESE largest banks must keep their capital adequacy ratio no less than 9.5 percent by the end of 2013, the banking regulator said yesterday.

China Banking Regulatory Commission said the country's largest banks, or "systemically important" ones, also have to keep their Tier-1 Capital Adequacy Ratio no less than 7.5 percent by the end of next year and Core Tier-1 Capital Adequacy Ratio at 6.5 percent or more.

The three ratios are a measure of the amount of a bank's capital as a percentage of its risk-weighted assets. These figures reflect a bank's capacity to cushion potential losses with its capital.

Systemically important banks refer to those that are most significant to a country's economy and the collapse of them may lead to serious problems for the nation.

There is not a list of such banks, but the Industrial and Commercial Bank of China, the Bank of China, China Construction Bank, the Agricultural Bank of China and the Bank of Communications are believed to be systemically important.

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