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China Drafts Tougher Capital Rules for Too-Big-to-Fail Banks

April 2, 2021, 8:54 AM

China’s financial regulators plan to impose additional capital requirements on the nation’s systemically important banks, seeking to curb risks and safeguard stability of the $49 trillion industry.

Banks considered too big to fail will be put into five categories and face a surcharge of between 0.25% and 1.5% on top of the mandatory capital adequacy ratios, the People’s Bank of China and the China Banking and Insurance Regulatory Commission said in a draft rule on Friday.

Lenders will also need to make detailed plans on how to recover from a crisis, as well as draft living wills with disposal plans...

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