Moody's said China's final rules on liquidity risk management for banks are credit positive, noting that the net stable funding ratio, or NSFR, requirement for larger banks should bolster their funding resilience and limit their reliance on less stable funding sources.
The China Banking and Insurance Regulatory Commission on May 25 said it revised liquidity risk management rules for commercial banks, effective July 1. The NSFR requirement will be applied to banks with assets of no less than 200 billion yuan, while banks with assets of less than 200 billion yuan will be subject to the high quality liquid asset adequacy ratio.
The rating agency said the largest Chinese banks have larger retail branch networks and more retail customer deposits in their deposit mix than smaller joint-stock commercial banks. As such, these banks' higher proportion of retail deposits will allow them to report a higher NSFR, easing their regulatory requirements, the agency added.
As of June 1, US$1 was equivalent to 6.42 Chinese yuan.
