Research About The Effect On Commercial Banks In China Based On Basel Ⅲ

Basel I was released in1988by Basel Committee on Banking Supervision (BCBS). Basel Ⅰ required banks to maintain enough capital to absorb losses without causing systemic problems. BCBS released Basel Ⅱ in2004. A’revised framework’ was pronounced in Basel Ⅱ, the ’Three pillars’is the main content in Basel Ⅱ.Then in2010BCBS released Basel Ⅲ. Basel Ⅲ made a decisive breakthrough which stressed that the micro-supervision and macro-prudential supervision in parallel.The Committee’s comprehensive reform package addresses the lessons of the financial crisis. In2007, the outbreak of the subprime mortgage crisis, escalating evolved to become the global financial crisis, many famous banks went bankrupt. So BCBS decided to correct the bank regulatory framework. The Basel Ⅲ framework was approved by the G20leaders in South Korea. The new framework contents two parts, including the capital regulation and a global liquidity standard. First, Basel Ⅲ raised the quality of bank capital which focused on common equity, the highest quality component of a bank’s capital. Second, the regulation capital ratio is highly rising, which enhanced risk coverage. Third, the new regulatory framework required banks measuring the leverage ratio and supplementing the risk-based capital requirement. Last, reducing procyclicality and promoting countercyclical buffers are required in Basel Ⅲ.The China Banking Regulatory Commission issued’the implementation of the new regulatory standards guidance for China banks’in2011, marking the establishment of China Basel Ⅲ. Since then, China’s banking industry simultaneously implemented the Basel Ⅱ and Basel Ⅲ regulatory requirements. Basel Ⅲ provides a complete set of regulatory system for China’s banking industry, China’s banking industry is in strict accordance with the new standard execution, and the implementation of the new norms has had a profound impact on China’s banking industry. After the subprime mortgage crisis, the economy in China recovered rapidly which laid a solid foundation external environment to carry out a comprehensive ’Basel Ⅲ’. Chinese commercial banks mainly operated deposit and loan business with a lower leverage ratio which created a stable internal environment for China’s banking industry. Favorable internal and external environment is conducive to the Chinese commercial banks to carry out the new Basel Capital Accord. But along with implementing the’Basel Ⅲ’, it also shows a lot of problems. How to adapt to the new Basel regulatory requirements is the main task for Chinese commercial banks. This is also the significance of the topic in this article; I hope that through this analysis, I will make some recommendations for China’s banking supervision.