By Ba Shusong, the Research Institute of Finance, the DRC

Research Report No 114, 2013

Abstract:

As a member country of the Basel Committee on Banking Supervision, the United States issued a draft plan of Basel II and Basel III in 2012. The draft plan met strong opposition from the banking industry, particularly small and medium-sized banks, and the US banking regulatory authorities had to postpone the timetable for its implementation. This report analyzes the US version of Basel regulatory standards made by the US banking regulators and discusses the main reasons why it was opposed by small and medium-sized banks.

In addition, it offers suggestions to the construction of the Chinese financial regulation and supervision system. The Chinese regulators should, in the course of implementing Basel III in China, implement a differentiated supervision to provide enough room for the development of small and medium-sized banks; issue consistent policies by different regulators to improve a financial system's ability to resist risks; and coordinate international regulations with existing domestic laws and regulations on supervision.