Regulator plans to come out with measures for large, key companies
China's financial regulatory body is planning to require "too big to fail" conglomerates to replenish capital and meet new regulatory requirements, a measure to prevent cross-market risk contagion and continually reduce the corporate debt level.
New standards of capital adequacy ratio are under discussion among policymakers to curb the "barbaric growth" of large financial holding groups through high-leveraged mergers and acquisitions of financial institutions, according to analysts.
The capital adequacy ratio is an important gauge to monitor financial institutions' risk, regarding the percentage of total assets to the risk-weighted assets plus current liabilities. Adequate capital could be a cushion against shocks that may result in debt default and bankruptcy.