China regulator unveils draft rules on limiting bank exposure

BEIJING (Reuters) - China's banking regulator published on Friday new draft rules seeking to limit commercial banks' large exposures, marking the latest regulatory step to contain leverage risks in the financial system.

In a statement, the China Banking Regulatory Commission said commercial banks' exposure to the interbank market cannot exceed 25 percent of their tier-1 capital, while their exposure to the non-interbank market cannot exceed 20 percent of their tier-1 capital.

The regulator said there would be a three-year grace period for commercial banks for the interbank market exposure requirements.

(Reporting by Beijing Monitoring Desk; Editing by Richard Borsuk)