CBIRC Holds Conference on Supervision of Banks and Insurers
CBIRC published a statement on the 2020 National Banking and Insurance Industry Supervision and Management Conference. The statement also highlights the focus areas for CBIRC for 2020. Key work areas will involve addressing of issues related to shadow banking, strengthening of asset and liability management, improving the recovery and resolution framework, identifying the domestically important financial institutions, and development of green finance.
In the meeting, it was highlighted that progress has been made in preventing and tackling financial risks. Reforms in the areas relating to key institutions have continued to deepen while corporate governance mechanisms have been further improved. It was emphasized that in 2020 the “Thirteenth Five-Year Plan” will be completed. CBIRC published questions and answers (Q&As) related to the supervision and management conference. The discussions covered the progress in the area of nonperforming loans (NPLs). Approximately CNY 2 trillion in NPLs were disposed of in 2019. All loans that were overdue for more than 90 days by commercial banks were included in non-performing asset management. Shadow banking and cross-financial risks continue to converge. Over the past three years, the size of shadow banking has dropped by CNY 16 trillion from its historical peak. Problematic financial institutions have been dealt with in an orderly manner and key risks in the insurance field have been alleviated.
In 2020, the key areas of work will include the following:
- Continued dismantling of shadow banking, particularly reduction in the high-risk shadow banking business to prevent resurgence
- Effectively prevention and mitigation of the risks of external shocks, work on stress testing for banking and insurance institutions, and improvement in response plans
- Introduction of measures for supervision and evaluation of financial services for small and micro enterprises in commercial banks (comprehensive financing cost of inclusive small and micro enterprises to be reduced by another 0.5 percentage points)
- Improvements to the equity structure and encouragement for domestic and overseas professional institutions with prominent main businesses, advanced management, and excellent records to invest in Chinese banks and insurance companies
- Comprehensive strengthening of the supervision of asset and liability quality (Based on the existing five-level classification, refine the classification rules and improve the accuracy of asset classification. Regulations on the quality of liabilities should be formulated to improve the stability and matching of liabilities of bancassurance institutions, especially small and medium-size institutions.)
- Strengthening of the recovery and resolution mechanism of bancassurance institutions and closely working with relevant departments to determine the list of domestically important financial institutions
- Development of green finance and launch of a number of financial products that are conducive to environmental protection
Related Links (in Chinese)
Keywords: Asia Pacific, China, Banking, Insurance, NPLs, Shadow Banking, ALM, Governance, Systemic Risk, Recovery and Resolution, ESG, CBIRC
Previous Article
IFC Publishes Annual Report, Briefs on Work Done in 2019Related Articles
EBA Guide to Monitor Threshold for Intermediate Parent Undertakings
The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).
PRA Finalizes Approach to Supervision of International Banks
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
FCA Issues PS21/9 on Implementation of Investment Firms Regime
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
EBA Proposes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
IOSCO Proposes Recommendations on ESG Ratings and Data Providers
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
ESMA Group Issues Recommendations on RFR Switch in Interdealer Market
The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.
EC to Defer Application of SFDR Standards Till July 2022
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
EIOPA Consults on Reporting and Disclosures Under Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.
BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
EBA Seeks Views on Proportionality Assessment Methodology
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
