Chinese lenders ask central bank to ease capital headroom

The easing would free up funds for loans to support the economy.

Two eastern China-based lenders have urged the People’s Bank of China (PBOC) to relax its assessment of capital adequacy, reports Reuters.

Local regulators have reportedly supported the move.

The easing of one indicator of capital health would free up funds at small and medium banks for loans to support the economy, sources said, with one of them saying that the central bank could approve the request as early as within July.

It was unclear to what extent requirements for the capital health indicator would be lowered and how many banks were taking similar steps.

The Chinese government has asked the banking sector to give up $214b (CNY1.5t) in profits this year to offset the economic consequences of the pandemic, using measures such as increased lending, slashed interest rates and cuts to fees.

Here's more from Reuters.