China's implementation of Basel III - report published by the Basel Committee
27 September 2013
The Basel Committee on Banking Supervision has today published a report on the regulations that implement the Basel capital framework in China.
The compliance of China's domestic capital rules with the international Basel capital standards was assessed as part of the Committee's Regulatory Consistency Assessment Programme (RCAP). The assessment team held discussions with senior officials and staff of the China Banking Regulatory Commission (CBRC), and met with senior representatives from the People's Bank of China (PBoC), selected commercial banks and audit firms based in China.
China's implementation of the Basel capital framework was found to be closely aligned with the Basel III global standards: 12 out of 14 assessed components were found to be "Compliant". The two components that were graded "Largely Compliant" pertain to the Standardised Approach for credit risk and Pillar 3. Although some differences with the Basel framework were found in these areas, none of the findings were judged to be material at this point. Therefore, the overall framework of China's capital regulation was graded "Compliant".
During the assessment, the CBRC issued four new regulatory documents that rectified a number of provisions that were initially identified as deviations from the Basel framework. These additional regulatory documents considerably improved the level of compliance with the Basel standards. The CBRC's response to the report expresses the strong commitment of the Chinese authorities to implement the global regulatory reforms.
The report published today reflects the Committee's continuing efforts to promote adoption of its standards and to monitor its members' full and consistent compliance with the Basel framework. Through the RCAP, the Committee monitors the timely adoption of regulations by its members, assesses their consistency with the Basel framework and analyses the quality of intended regulatory outcomes. The RCAP also helps member jurisdictions to identify deviations from the Basel framework and assesses the materiality of any deviations.
The China report is the sixth RCAP assessment of Basel III capital standards. Earlier reports on the European Union, Japan, Singapore, Switzerland and the United States were published by the Committee and are available on the Basel Committee's website. Assessments of the implementation of the Basel III capital standards in Brazil and Australia are currently under way, and an assessment of Canada is forthcoming. In addition, follow-up assessments of the final Basel III rules in the European Union and the United States will start later this year.