Basel Committee on Banking Supervision recently announced that 27 central banks and regulatory agencies have been responsible for the content of Basel II agreement & Multi Socket Outlet GL-06-PT66888546;, and is expected in 11 months through the G20 summit. Thus, Basel II a new generation Ⅲ as the regulatory framework for the international banking community the basic shape the framework of international norms and the global banking industry will inevitably have a profound impact.The new regulatory standards for individual bank's capital quality, capital quantity, capital regulatory approach will have a significant impact that can affect the macroeconomic situation, the entire banking system's credit supply capacity and the global banking business model.

 In the more stringent regulatory environment under pressure, banks must develop reasonable capital supplement mechanism to achieve the new standards and maintain continuous operations.Taking into account the requirements of the capital cushion the bank's core tier one capital adequacy ratio increased to 7%, a capital # adequacy ratio increased to 8.5%. Although the data show that the American and European banks with capital adequacy ratio of 10% of the average level, but also the core of a capital adequacy ratio of distance, the new regulations would constitute a significant pressure on structured finance, the current bank in the capital of certain types of assets will be removed, and banks need additional capital assets of high quality supplement.According to the original provisions of the Basel Capital Accord, an innovative hybrid capital instruments to complement a capital, hybrid debt capital instruments and subordinated debt can add two long-term capital.

The new regulatory capital requirements defined, a capital can only contain ordinary shares (including retained earnings), two future risk capital can not provide adequate protection, can only absorb losses in liquidation under the conditions, and thus the quality of global commercial banks to raise capital enhance the loss of absorptive capacity, must adjust the capital structure, attention to ordinary share capital added, the development of capital accumulation based on internal financing of capital within the source added channels.Raise capital for, including not only the improvement of capital adequacy standards, but also the adjustment of the scope and quality of capital, which is bound to improve bank capital requirements, it would also force the banks to profit model and the corresponding risk of the assets structure adjustment .

First, the expected profitability of the banking space will be accompanied by lower leverage and asset growth slows and decreases. On the one hand, the core of an ordinary share capital is divided into a higher capital requirements proposed, and the improvement of common stock will increase the capital requirements of banks operating costs, when these costs onto consumers when they put lead to a decline in financing needs; On the other hand, in order to maintain a high level of capital adequacy ratio, the denominator the number of risk-weighted assets must be controlled, which means that operating leverage and asset size reduction, especially in some European and American banking business and the higher leverage assets will shrink substantially.