China's regulator to big banks: Raise capital ratios

Source says CBRC told country’s top banks to increase capital adequacy ratios by 2 percent from average.

China's banking regulator has urged big state lenders including Bank of China to raise capital adequacy ratios to 13 percent next year after rapid loan expansions in 2009, according to a source with direct knowledge of the matter in a report in Reuters.

Bank of China, China Construction Bank and Bank of Communications have notified the regulator they are working on fund raising proposals to meet the guideline, said the source, who declined to be identified as he was not authorised to speak to the media.

The regulator, the China Banking Regulatory Commission (CBRC), did not respond to calls seeking comment.

Capital adequacy ratios, a key measure of financial strength, are at about 11 percent on average for China's big banks, compared with the minimum regulatory requirement of 8 percent for all banks.