China to ease some rules on banks' liquidity ratios
BEIJING Oct 11 (Reuters) - China's banking regulator plans to slightly loosen some requirements on lenders' liquidity levels as it looks to reflect new changes in the Basel III guidelines, it said in a statement on Friday.
The China Banking Regulatory Commission said the deadline for banks to meet the required minimum liquidity coverage ratio (LCR) would be extended to the end of 2018 from 2013.
Banks could first meet a more lenient LCR level of 60 percent by the end of 2014 and then make equal rises of 10 percent each year within the grace period between 2014 to 2018.
The liquidity coverage ratio is a regulatory barometer to help gauge banks' short-term resilience to high-stress scenarios, and is part of the set of reforms introduced by Basel III to help deliver a more stable and healthy banking system.
Under the draft rules, the regulator will also allow banks to appropriately lower LCR ratios under some extreme scenarios to cushion any possible negative impact on the entire financial system.
The draft rules also scrap an earlier regulation on net stable funding ratios (NSFR), according to the statement published on the CBRC's website.www.cbrc.gov.cn.
The CBRC said it is seeking public opinion on the draft regulations.
It had earlier issued a new set of rules governing banks' capital adequacy ratios as part of China's efforts to implement Basel III guidelines.
The Chinese version rules are largely believed to be more stringent than the international standard, although most Chinese banks have a relatively strong and steady capital base compared with their western counterparts.
China had earlier delayed in June the enforcement of tougher capital requirements for its banks to 2013 from 2012 to avoid squeezing credit conditions and dragging further on the already slowing economy. (Reporting by Aileen Wang and Jonathan Standing; Editing by Kim Coghill)
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