China's property market, once a pillar of growth, has slowed sharply over the past year, hobbled by fragile demand and mounting debt defaults by developers. The two regulators said implementation of the new rules would leave capital adequacy ratios in the banking sector generally unchanged, though the ratios for some banks would change slightly. The commission and central bank are seeking public comment before implementing the changes on Jan. 1, 2024. (Reporting by Beijing Newsroom; Editing by Bradley Perrett)
BEIJING, Feb 19 (Reuters) - China's banking regulator
and the central bank plan to adopt a more differentiated
regulatory system for assessing commercial banks' capital
adequacy and risk management, in a step to better prevent risks
in the country's financial system.
The China Banking and Insurance Regulatory Commission and
the People's Bank of China on Saturday jointly released amended
draft rules that they said aimed to help banks "continuously
improve the precision of risk measurement and guide banks to
better serve the real economy."
The draft rules, which bring the banking sector closer to
global standards, will divide lenders into three groups based on
business scale and risk level.
The rules will apply a differentiated regulatory system to
banks. Lenders with a relatively large scale of assets or
relatively large cross-border business will be under stricter
capital requirements and will have to disclose more information
to regulators.
In addition, the rules will include more specific factors to
measure banks' risk exposure to mortgage lending, such as the
types of property, sources of repayments and loan-to-value
ratios.
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