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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (382)	8/17/2003 10:57:50 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China formally rejects Basel II rules By Richard McGregor in Shanghai and Charles Pretzlik in London Published: August 16 2003 5:00 \| Last Updated: August 16 2003 5:00 China has formally rejected the so-called Basel II rules governing the amount of capital that banks are obliged to operate with, and decided to introduce its own requirements on capital adequacy. Like India, China has decided that the new accord drawn up by the Bank for International Settlements in Basel does not take into account the particular circumstances of banks in developing countries. Liu Mingkang, head of the China Banking Regulatory Commission (CBRC), wrote to the Basel committee this week, saying: "Were it applied in our jurisdiction, Basel II would only be marginally more risk sensitive than Basel I, but would increase the overall capital for our entire banking system." China's own rules will retain an 8 per cent minimum capital-adequacy ratio requirement but will also include requirements for supervision and information disclosure, two elements in the new accord, according to the China Daily. China said it would stick with the old Basel accord for a number of years beyond 2006, when G-10 countries will start implementing the new guidelines. Chinese officials said yesterday that the policy would maintain pressure on its banks to continue reforms, without placing unreasonable, and unachievable demands on its institutions. Analysts in Europe said the significance of China's rejection of the accord was mitigated by the fact that the government would be expected to support any local bank in trouble. news.ft.com