China May Delay Tighter Bank Capital Rules to July, Daily Says

China may delay its planned tightening of capital requirements for commercial banks to the second half of the year after easing monetary policy to support the economy, China Daily reported.

The China Banking Regulatory Commission probably won’t make the new capital standards effective until July, the newspaper said, citing an unidentified government official. The regulator said in August it would require a capital adequacy ratio of 11.5 percent for “systemically important banks,” and 10.5 percent for smaller lenders, beginning Jan. 1.

Tougher capital rules could counter the effect of monetary policies, the newspaper reported, citing Cao Yuanzheng, chief economist at Bank of China Ltd. (3988)

China on Nov. 30 cut the amount of cash that banks need to set aside as reserves, the first reduction since 2008, as Europe’s debt crisis threatens exports and growth. Premier Wen Jiabao said this week that China may fine-tune monetary policy in response to simultaneous “downside pressure” on the economy and elevated inflation.

The CBRC’s press office in Beijing didn’t immediately respond to two calls seeking comment on the China Daily report.

Chinese banks had a capital adequacy ratio of 12.3 percent in the third quarter, according to the regulator’s website.

To contact the reporter on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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