- China’s Basel III capital adequacy
requirements and the capital conservation buffer were
implemented on January 1 of this year;
- Chinese regulators are contemplating allowing
banks to issue preference shares to meet Basel III regulatory
- Chinese banks are also looking to Additional Tier
1 (AT1) and Tier 2 issuances. AT1 issuances have a statutory
write-down point, whereas Tier 2 bonds will be written down
at the discretion of the CBRC;
- However it is unclear whether the CBRC will be
the only regulator making a point of non-viability (PONV)
determination or if others, such as the state council and the
Ministry of Finance, will be involved.
China’s Basel III regime is stricter than that
of the Basel Committee on Banking Supervision’s
(BCBS) international framework, and involves an...