The China Banking Regulatory Commission is evaluating whether to raise or lower the stake cap on foreign lenders' holdings in banks.
Chairman Liu Mingkang told The Standard it is now looking into synergies and problems brought about by the 20 percent cap. Any decisions will be announced by the first quarter of next year.
China should let foreign lenders have higher stakes in Chinese banks, that should be an indispensable way to wean state banks from their dependence on taxpayers' support. More importantly, it will intensify competition among banks and improve credit allocation.