From the WSJ:
China unveiled rules aimed at making sure banks keep on hand enough cash and other liquid assets after three credit squeezes hit the nation’s financial system last year.
…The new rules require banks to keep what is called a liquidity coverage ratio — a measurement comparing liquid assets to total net cash outflows over a 30-day period — at a level of 60 per cent by the end of this year and at 100 per cent by the end of 2018. Banks currently aren’t subject to such a requirement.
The regulator said the calculation will include banks’ off-balance-sheet business, such as some wealth-management products. The products are popular high-yielding alternatives to standard bank deposits in China, but carry higher risk.
The screw tightens a little more.
