Basel Accord Ⅲ Landing China's controversial bank says it's too harsh

Shin, Division and the "Twelve-Five" banking capital supervision of the overall framework and road map is gradually clear. According to the timetable established by the CBRC earlier, domestic commercial banks are required to report to the CBRC the relevant implementation situation and comments of the Basel Committee's reform package on international Banking Supervision System (hereinafter referred to as "Basel Ⅲ") before the end of October (see this newspaper "Basel agreement Ⅲ" China "Four supervisory tools Upgrade")　　, however, the new regulatory framework has stirred up waves within commercial banks as the Chinese version of the discussion is higher than the new capital requirements for international regulatory standards and the very "harsh" timetable. A number of commercial bankers interviewed by this newspaper said that at present, the controversy over the Ⅲ of the Chinese version of the Basel Accord focuses on three major aspects: first, how to define the importance of the system bank, according to the CBRC discussion draft, the system importance of banks in capital requirements, leverage and allocation rate and other indicators are put forward higher regulatory requirements; second,　　The commercial bank has criticized the transition period arrangement and the standard time, and thinks that it is too strict; Thirdly, the new indicator introduced by the CBRC on the basis of the provision of coverage-the provision/credit balance-commercial banks have different views on the requirement of no less than 2.5%.　　A senior shareholding bank admits that if the reserve/credit balance is not less than 2.5% of regulatory requirements, the shares will be a big impact on the profits and capital in all aspects, the industry has a voice proposed to reduce the standard to 2.4% or even 1.7%. On how to define the "systemically important bank", October 25, the CBRC insiders told the newspaper that the CBRC is still under study, "We do not specify which banks are systemically important banks." On the definition of "system importance" according to media reports, October 21, Wang Shaoxing, vice chairman of the CBRC, joined the 2010 Joint Meeting of the Governors of shareholding commercial banks, said that in the context of a new round of financial regulatory reform, the future of China's banking regulatory framework system can be summed up as "3+s".　　Among them, "3" represents the three most important pillars of the future regulatory framework, namely, strengthening the quality of capital and raising the level of capital, strengthening and perfecting the risk-resisting and counter-cyclical functions of asset loss provisioning, strengthening and perfecting the management of banking liquidity and regulatory standards for liquidity.　　"S" is to further strengthen the system, the importance of the supervision of operating institutions, namely systemic risk. "The most controversial issue at the moment is whether the equity bank should be classified as systemically important," he said. Is it all or part of it?　　"The head of the risk management Department of a joint-stock bank said that once listed as systemically important banks, banks would face higher capital regulatory targets, which would create greater pressure on the profits of the relevant commercial banks, including the preparation of additional capital and liquidity."　　The Chinese version of the Basel Ⅲ explicitly requires a 1% per cent additional capital for systemically important banks, with a number of targets (including capital requirements, leverage and reserve ratios) reaching the target time of 2012, and 2016 years for other systemically important banks. by BaselThe reference to the Ⅲ of the Protocol, systemically important the bank (systematically important banks) is a bank that has a large business scale, a high degree of complexity, a major risk event or a failure of business to bring systemic risks to the entire banking system.　　At present, the IMF and the Financial Stability Board (FSB) have proposed to assess the systemic importance of a single-family bank from three aspects of asset size, interconnectedness and substitution. People close to the regulatory level say that there is currently no uniform standard on how to define the importance of the system. "It's not just about the size of the asset alone, how these factors appear, what kind of indicators to capture, but also some difficulty, may eventually refer to national banking practice." However, a joint-stock Bank risk policy experts revealed to this newspaper, according to the current international practice, asset size of more than 50 billion U.S. dollars, can be characterized as systemically important banks, "from this perspective, most of China's commercial banks should be regarded as systemically important banks."　　Recently, the results of an international research institute show that two of China's 12 national shares are listed as systemically important financial institutions, except for work, construction, Chinese, agricultural and other five major lines. At present, according to the asset scale, the two largest assets in the stock bank are CITIC Bank and CMB.　　Also in terms of asset size, in early 2010, a British banker survey showed that 84 of the Bank of China, which entered the top 1000 of global banks in 2009, was much higher than the 2007 and 2008 45 and 52 levels. The risk management Department of the above-mentioned joint-stock bank analysis, in addition to the size of the assets, the system of importance indicators to define an important factor is the correlation (interconnection), which is related to the complexity of its financial institutions business, such as a bank in the overseas business or more foreign business,　　Think of it as systemically important. "At present, the joint-stock banks, in addition to the wide-development, and peace, most of them are national banks." If it has any kind of trouble, whether good or bad, its impact is absolutely national. From this point of view, it is system important.　　Analysis of the above-mentioned joint-stock bankers.　　The controversial "Chinese characteristics" Reserve index and the system importance how to define the bank, the allocation/credit balance--The China Banking Regulatory Commission unique design indicators, led to more different views of joint-stock banks. According to the discussions of the CBRC, the introduction of new regulatory indicators, that is, the ratio of provision to credit balances of not less than 2.5%, will be implemented from 2011 onwards, while insisting that the original provision coverage rate is no less than 150%.　　Among them, the system importance of the bank must be achieved by the end of 2012, the non systemically important bank for 2016 years. CICC analysis, as at the end of the first half of 2010, commercial banks overall and listed banks overall provision/total loans of 2.42% and 2.33%, overall, distance of 2.5% of the requirements is not far; but the sub-agency looks at the state-owned banks, joint-stock banks andThe city firm's reserve/Total loan is 2.5%, 1.74% and 1.85%, of which the Bank of commerce, Citic, the people's livelihood of the indicators are 1.98%, 1.38% and 1.8% respectively, if strictly in accordance with the 2.5% standards, joint-stock commercial banks are affected.　　Thus, the rebound of joint-stock banks is expected, in response to this new indicator of the different views focused on two: first, there is no international precedent, the logic of policy to be detailed; second, if the across, then the joint-stock bank is quite harsh. Still, a number of industry experts say the regulatory move is particularly meaningful.　　The above-mentioned joint-stock Bank risk management experts to the newspaper that many other indicators for direct copying from abroad, and "the provision/credit balance is the only one by the Chinese banking issues driven by the indicators, has a unique practical significance." These regulators also analysed to this newspaper that the current regulatory targets for coverage are not fully reflective of the risk resilience of financial institutions, and that "our risk resilience should be forward-looking."　　From a regulatory standpoint, the policy trend is prudent. "At present, some of the traditional regulatory indicators of the CBRC are basically outdated." "The above-mentioned joint-stock Bank analysis," 2004 years or earlier, the Chinese commercial Bank's bad balance and non-performing rate basically showed double drop situation, at this time again use this bad rate and allocation coverage index to supervise commercial bank will lose the effective significance. "The CBRC data show that by the end of the two quarter of 2010, China's domestic commercial banks overall non-performing loan rate of 1.3%, lower than the beginning of 0.28%."　　Commercial banks have set the coverage rate at 186%, up 31% from the beginning. The CBRC said there was indeed no uniform rules for the regulation of reserves in the international community because of the differing systems of countries and the fact that reserves were subject to accounting and tax arrangements. "Generally, national regulators have an independent reserve arrangement, but there is no international uniform rule, but that does not mean China cannot establish rules." "In addition to the above-mentioned joint-stock banks complain about the severity of indicators, commercial bankers also believe that the provision/loan balance of this indicator needs to be further refined."　　The CBRC also disclosed that the specific maximum requirements for this indicator, and further discussion of certification, the regulatory level may take into account the different commercial banks in the capacity to pay, spreads level, non-performing loans between the interbank situation.　　The head of the risk management Department of the joint-stock Bank believes that the new indicators should first take into account that the policy should not have too much negative impact on commercial banks.　　The above people suggest that in the implementation period, can set a certain period of transition for certain banks, follow-up a series of supporting policies, including accounting treatment, need to provide certain incentives to commercial banks, "in short, to give some incentives to commercial banks, so that the bank has the power to implement." He also believes that the adoption of a one-size-fits-all standard for different banks is debatable. "Loans as a proportion of total assets, different banks also have differences, proposed to set some supporting indicators, such as the introduction of loans and total capitalProportion of production, transaction-type assets, etc. "The above-mentioned joint-stock Bank Risk Management department responsible analysis, in addition to the asset scale, the system importance index defines an important factor is the correlation (interconnection), this factor is related to its financial institution business complexity, for example a bank has the overseas business or the field business more,　　Think of it as systemically important. "At present, the joint-stock banks, in addition to the wide-development, and peace, most of them are national banks." If it has any kind of trouble, whether good or bad, its impact is absolutely national. From this point of view, it is system important.　　Analysis of the above-mentioned joint-stock bankers.　　The controversial "Chinese characteristics" Reserve index and the system importance how to define the bank, the allocation/credit balance--The China Banking Regulatory Commission unique design indicators, led to more different views of joint-stock banks. According to the discussions of the CBRC, the introduction of new regulatory indicators, that is, the ratio of provision to credit balances of not less than 2.5%, will be implemented from 2011 onwards, while insisting that the original provision coverage rate is no less than 150%.　　Among them, the system importance of the bank must be achieved by the end of 2012, the non systemically important bank for 2016 years. CICC analysis, as at the end of the first half of 2010, commercial banks as a whole and listed banks overall provision/total loans of 2.42% and 2.33%, overall, the distance of 2.5% is not far from the requirements;　　% and 1.85%, of which the Chinese merchants Bank, Citic, the people's livelihood of this index is 1.98%, 1.38% and 1.8% respectively, if strictly according to the 2.5% standards, joint-stock commercial banks are affected first.　　Thus, the rebound of joint-stock banks is expected, in response to this new indicator of the different views focused on two: first, there is no international precedent, the logic of policy to be detailed; second, if the across, then the joint-stock bank is quite harsh. Still, a number of industry experts say the regulatory move is particularly meaningful.　　The above-mentioned joint-stock Bank risk management experts to the newspaper that many other indicators for direct copying from abroad, and "the provision/credit balance is the only one by the Chinese banking issues driven by the indicators, has a unique practical significance." These regulators also analysed to this newspaper that the current regulatory targets for coverage are not fully reflective of the risk resilience of financial institutions, and that "our risk resilience should be forward-looking."　　From a regulatory standpoint, the policy trend is prudent. "At present, some of the traditional regulatory indicators of the CBRC are basically outdated." "The above-mentioned joint-stock Bank analysis," 2004 years or earlier, the Chinese commercial Bank's bad balance and non-performing rate basically showed double drop situation, at this time again use this bad rate and allocation coverage index to supervise commercial bank will lose the effective significance. "The CBRC data show that by the end of the two quarter of 2010, China's domestic commercial banks as a wholeThe non-performing loan rate was 1.3%, down 0.28% from the beginning.　　Commercial banks have set the coverage rate at 186%, up 31% from the beginning. The CBRC said there was indeed no uniform rules for the regulation of reserves in the international community because of the differing systems of countries and the fact that reserves were subject to accounting and tax arrangements. "Generally, national regulators have an independent reserve arrangement, but there is no international uniform rule, but that does not mean China cannot establish rules." "In addition to the above-mentioned joint-stock banks complain about the severity of indicators, commercial bankers also believe that the provision/loan balance of this indicator needs to be further refined."　　The CBRC also disclosed that the specific maximum requirements for this indicator, and further discussion of certification, the regulatory level may take into account the different commercial banks in the capacity to pay, spreads level, non-performing loans between the interbank situation.　　The head of the risk management Department of the joint-stock Bank believes that the new indicators should first take into account that the policy should not have too much negative impact on commercial banks.　　The above people suggest that in the implementation period, can set a certain period of transition for certain banks, follow-up a series of supporting policies, including accounting treatment, need to provide certain incentives to commercial banks, "in short, to give some incentives to commercial banks, so that the bank has the power to implement." He also believes that the adoption of a one-size-fits-all standard for different banks is debatable. "Loans accounted for the proportion of total assets, different banks also have differences, it is proposed to set some supporting indicators, such as the introduction of loans and total assets ratio, the proportion of trading assets." ”