China's central bank has announced new capital rules that will lower the reserve requirements for financial institutions that increase to small businesses. Under reforms announced by the People's Bank of China, commercial banks will be eligible for a 50 basis point reduction in their regulatory capital requirement if they can demonstrate that 1.5 per cent of their overall lending is made to small business borrowers. The capital discount will be lowered by an additional 100 basis points if small business borrowers account for more than 10 per cent of a bank's loan book. Xinhua News Agency reported that the new capital incentives would take effect in 2018. China's banking regulators have ordered a crackdown on short term loans to homebuyers to try to cool down an overheated property market and reduce risks to China's financial system, the FT reports. China's lenders doubled consumer lending to US$192 billion in the first eight months of a year as home-buyers used the short term loans as deposits for properties. New HSBC Chairman Mark Tucker is said to have decided on his first day in the job to appoint an internal candidate as new HSBC CEO to replace the retiring Stuart Gulliver. The FT reports Tucker was likely to have chosen HSBC's current head of retail banking and wealth management John Flint, and is awaiting regulator approval. The US Federal Reserve announced it had fined HSBC US$175 million for "unsafe and unsound practices" in its foreign exchange trading business. "The firm failed to detect and address its traders misusing confidential customer information, as well as using electronic chatrooms to communicate with competitors about their trading positions," the Federal Reserve said.