China Banking Regulatory Commission issues new guidelines in respect of Basel III

On 27 April, 2011 the China Banking Regulatory Commission (CBRC), the PRC regulator for banking financial institutions, issued official guidelines for implementing Basel III requirements in its Guidelines for Implementing New Regulatory Standards in the PRC Banking Industry (the CBRC Guidelines).

The CBRC Guidelines expressly set out detailed requirements on capital adequacy ratios, a leverage ratio, liquidity requirements and provision ratios that PRC banks should comply with and also provide for different transition periods within which the requirements must be satisfied.

Generally speaking, the requirements and the timelines to satisfy such requirements as provided in the CBRC Guidelines are stricter than that under Basel III. A brief summary of the CBRC Guidelines is set out below.