Featured Product

    CBIRC and PBC Issue Measures to Identify Systemically Important Banks

    December 03, 2020

    CBIRC and PBC jointly issued measures for the assessment and identification of systemically important banks (SIBs) in China. The measures specify the method, scope, and procedures for this assessment and establish a four-dimensional assessment indicator system of systemic banks, with focus on size, correlation, substitutability, and complexity. In specific assessment processes, data reporting templates and instructions will be sent to banks that participate in the assessment, with a view to collecting the data for assessment. In the future, work will begin on formulating additional regulatory requirements that are to be imposed on the identified systemically important banks.

    As per the stipulated process, quantitative assessment indicators will be used to calculate the systemic importance score of banks that participate in the assessment; those scoring as high as 100 will be included in the initial list of systemically important banks. Then, regulatory judgment will be made after taking other quantitative and qualitative information into consideration to comprehensively assess the systemic importance of the banks. For this exercise, the data of participating banks will be collected and analyzed, post which the initial list of systemically important banks will be proposed. The scope of participating banks is to be determined every year. Finally, any necessary adjustments will be made to the initial list based on supervisory judgments. The final list of systemically important banks will be confirmed by the Financial Stability and Development Committee (FSDC) of the State Council and jointly released by PBC and CBIRC. 

    Going forward, PBC will work with CBIRC to formulate additional regulatory requirements for systemically important banks in China. The regulatory requirements are expected to be imposed on systemically important banks with regard to metrics such as additional capital, leverage ratio, large exposure, corporate governance, recovery and resolution plans, information disclosure, and data reporting. Moreover, measures will be taken to establish an early correction mechanism to motivate systemically important banks to reduce complexity and systemic risks, establish and improve a sound internal capital constraint mechanism to strengthen banks’ capacity of guarding against risks and absorbing losses, and enhance their self-rescue capability to prevent the “too big to fail” risks. For systemically important banks of different groups and types, targeted policies, as well as differentiated schemes for additional regulation, will be implemented based on their operational characteristics and systemic risks. Meanwhile, a reasonable transition period will be arranged to ensure that the policies produce neutral effects and are implemented in a sound and orderly manner.

     

    Related Links (in Chinese)

    Keywords: Asia Pacific, China, Banking, Systemic Risk, Too Big to Fail, Q&A, D-SIBs, Reporting, CBIRC, PBC

    Featured Experts
    Related Articles
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7868