China may loosen capital requirements
Updated: 2012-01-19 15:03
By Song Jingli (chinadaily.com.cn)
China may relax capital requirements for banks to boost their lending capacity, Bloomberg reported Thursday, citing four unidentified industry insiders.
The China Banking Regulatory Commission is delaying implementing the most stringent capital adequacy ratios, but is yet to complete establishing how capital requirements will be calculated and has not told banks how long the implementation may be delayed, the report said.
The risk weighting on personal operating loans given to small businessmen may be cut to 75 percent from the current 100 percent, while the ratio on loans to small and micro-sized firms would be lowered to 50 percent from 75 percent, the report cited two of the experts.
The regulator may also allow banks to increase the excess bad-loan reserves used in calculating risk buffers, said the report.
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