Banks in China will be required to comply with the regulations laid down in the new Basel III agreement, it has emerged.
Policymakers in Beijing have decided that financiers operating in the Asian superpower will be put under the same level of regulatory supervision as their counterparts across the world as of the beginning of 2013.
Under the terms of this agreement, it will be compulsory for companies to hold an increased amount of tier 1 capital in order to make sure they will not need assistance from taxpayers should they run into more debt issues in the future.
All banks participating in the Basel III arrangement will be given a period of ten years to restructure their capital sheets accordingly.
It was previously unclear as to whether or not China would take part in this regime, but a meeting between premier Wen Jiabao, cabinet members and officials from the State Council and the China Banking Regulatory Commission has resulted in the country agreeing to do so.
By Asim Shah