CBRC Releases Draft Rules for Capping Exposure of Commercial Banks


The China Banking Regulatory Commission has unveiled a new set of draft regulations that will curb the large-scale exposures of commercial banks, as part of efforts to deleverage the Chinese financial system and contain financial risk.

Under the new rules the exposure of commercial banks to the interbank market will be limited to 25% of tier-1 capital, while the ceiling for exposure to the non-interbank market will be set at 20% of tier-1 capital.

CBRC said that it will grant commercial banks a three-year grace period for compliance with the new interbank market exposure requirements.