July 25, 2018 / 3:09 PM / a year ago

China c.bank may ease capital rule to encourage lending - Bloomberg

July 25 (Reuters) - Some Chinese banks have received notice from the country’s central bank that a specific capital requirement will be eased in order to support lending, as the authorities try to mitigate increasing risks to the economy from the trade war, Bloomberg reported.

The People's Bank of China (PBOC) told some institutions that the so-called "structural parameter" in the macro-prudential assessment (MPA) of their balance sheets will be lowered by around 0.5 points, Bloomberg reported bloom.bg/2LEUuTe on Wednesday, citing people familiar with the matter.

MPAs are regulations that minimize risk at financial institutions.

The reduction will bring down the amount required for capital buffers, the Bloomberg report said.

The PBOC said in the notice that the change is being made to support local financial institutions in meeting credit demand effectively, the report said.

Reuters could not contact the PBOC outside regular business hours. (Reporting by Diptendu Lahiri in Bengaluru; Editing by Maju Samuel)

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