China opts out of Basel II

In a letter to the Basel Committee on Banking Supervision at the end of July, CBRC chairman Liu Mingkang emphasised his support for the Basel Committee’s aim to create a more risk-sensitive framework, but noted “were it applied in our jurisdiction, Basel II would be only marginally more risk-sensitive than Basel I, but would increase the overall capital for our entire banking system.” Instead, China’s banking sector will remain on Basel I “for a few more years” after the implementation date,