Bloomberg report on a People's Bank of China announcement describing a new Macro Prudential Assessment system, or MPA.

  • From December 29
  • Says the implication of the measure is potentially less likelihood of required reserve ratio cuts

The MPA idea is to use the ratio of deposits that must be held at the PBOC as a method for reining in risks

  • Exposure to stock and bond markets will be used in calculating ratios for individual banks
  • Officials will also look at growth in lending, rates on loans and capital adequacy

"We'll see less across-the-board cuts" in the RRR, said Ming Ming, head of fixed income research at Citic Securities Co. in Beijing who formerly worked in the PBOC's monetary policy division. "The MPA framework signals policy makers will move away from universal reserve ratio changes to being in favor of using the tool to fine-tune requirements for individual banks."

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