China's Own Version of Basel III and Its Likely Impact on China's Banking Sector

On 3 May 2011 the China Banking Regulatory Commission (CBRC) published its Guidelines for Implementing New Regulatory Standards in the PRC Banking Industry ('China's Basel III'). As a result, Chinese banks will have to fully implement the new standards before the official end-2018 deadline for Basel III, and systemically important banks will be subject to a 1% (provisional) capital surcharge. At the same time, the CBRC is looking to encourage the banks to adopt a different approach while sticking to a traditional business model. It will be interesting to see how they respond