2 years, 5 months ago
Will China Banks have adequate capital ratios to loan money in 2011?
China has ordered banks to loan $1.1 trillion 2010
How long can Chinese Banks sustain this level of investment?
How long can Chinese Banks sustain this level of investment?
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M$1 Answer
According to latest report by .xinhuanet.com, Chinese banks' capital adequacy ratio is well above the international standard of 8%. But the uncertainty of of events in the year 2010, will not insure that they can sustain the same level of investments. The investments are not diversified, concentrated only on certain sectors. If these sectors hit a downturn, it's only a matter of time the capital adequacy ratio will drop below the international standards.
-quote-
"Chinese banks reported 11.4 percent of capital adequacy ratio at the end of the third quarter, well above the international safety standard of 8 percent, which added evidence that the nation's banking industry was in good shape.
The banks' core assets capital adequacy ratio reached 9 percent, said a report posted on the website of the China Banking Regulatory Commission (CBRC)."
-end of quote-
-quote-
"Chinese banks reported 11.4 percent of capital adequacy ratio at the end of the third quarter, well above the international safety standard of 8 percent, which added evidence that the nation's banking industry was in good shape.
The banks' core assets capital adequacy ratio reached 9 percent, said a report posted on the website of the China Banking Regulatory Commission (CBRC)."
-end of quote-
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