CapitalAdequacy资本充足率

Capital adequacy is the minimum level of capital required, by regulation, to be held by a bank. It is also a good measure of a bank's net worth and reflects a bank's ability to bear losses without becoming insolvent¹. As regulator, the PBOC realized early the importance of having sufficient reserves to offset² losses from bad debt. Prior to March 1998, the reserves required were 18 to 20% of deposits. Now there is a legal requirement for banks to hold a minimum capital adequacy ratio of 8%. The main reason for this reduction was to improve the economics of the banks in China