China regulator belies enforcement of stricter capital rules for big banks

CBRC requires the Big 5 to keep a minimum capital adequacy ratio of 11.5% based on the Basel III global regulatory framework.

China's banking regulator said Tuesday it hasn't changed the rule on how much capital the country's five largest banks should hold against their risking-bearing assets, but added banks should improve their capital management over time.

"The banking regulator requires the five largest banks to keep a minimum capital adequacy ratio of 11.5%, and there's no change (to the rule)," the China Banking Regulatory Commission said in a statement.

An official at the CBRC's press office told Dow Jones Newswires that the target was set at the start of this year and based on the Basel III global regulatory framework.

"As the regulator, we hope banks can improve their ability to manage capital over time," said the official, who declined to be named.

The comments came after Bloomberg News reported Monday that the regulator has required Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Bank of China Ltd. and Bank of Communications Co. to maintain capital adequacy ratios of at least 11.8% in 2011, while Agricultural Bank of China Ltd. should target a ratio of 11.7%.

Adding to the confusion, the official Xinhua News Agency reported Tuesday afternoon that the CBRC confirmed it had raised the capital adequacy ratio for the five banks, before issuing a correction Tuesday evening after the CBRC denial.

View the full story in The Wall Street Journal.