No delay for China's banks on Basel III

CHINESE banks will not delay implementation of tougher capital rules even though American lenders have done just that as the regulator reiterated the need to comply with the new rules on financial reporting.

The tougher rules, known as Basel III, were developed by the Basel Committee on Banking Supervision to address financial regulation deficiencies arising from the 2008-09 global financial crisis.

The rules essentially require banks to hold more capital as risk cushion against bad times, and were supposed to come into effect on January 1, 2013. But the Federal Reserve said last Friday that the implementation of the rules will be delayed in the United States as it continues to canvas views.

China, however, will not postpone the implementation of Basel III, Shanghai Securities News reported yesterday citing unnamed sources.

"The implementation will not be delayed," a bank source insisted to Shanghai Daily. "We have recently received a notice from the regulator that from January 1 financial reporting must reflect the new capital rules."

A foreign bank source said the first reporting date is January 18, and the results will be submitted to the People's Bank of China and the China Banking Regulatory Commission on a quarterly basis. Last Friday the regulator reminded banks about the reporting compliance.

"There's no need to delay the new rules, since the large banks have all met capital requirements set out by Basel III," the source said.

"Although there's a grace period of six years, I think the smaller banks will likely meet the requirement in a shorter time."

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