Featured Product

    CBIRC Issues Rules on Implementation of Recovery and Resolution Plans

    June 09, 2021

    CBIRC published interim measures for implementation of recovery and resolution plans of bancassurance institutions, along with the questions and answers (Q&A) on these measures. The bancassurance institutions, as mentioned in these measures, refer to the financial institutions established within the territory of the People’s Republic of China, such as commercial banks, rural credit cooperatives, and other financial institutions that accept public deposits, in addition to financial asset management companies, financial leasing companies, and insurance companies. These measures, draw on the international financial regulatory standards while considering the peculiarities of the local environment, came into force on the date of promulgation.

    The measures cover basic principles behind establishment of a recovery and resolution plan mechanism, supervision and administration of such plans, and supplementary requirements or provisions related to recovery and resolution planning. The measures also detail the scope of application, internal governance structure of financial institutions, implementation of the information management system, and working mechanism between supervisory departments. The measures set out objectives for development of recovery and resolution plans, content to be included in the recovery and resolution plans, and implementation process of recovery and resolution plans. The “recovery plan” referred to in these measures refers to a response plan formulated in advance by a bancassurance institution and approved by CBIRC and its dispatched offices while the "resolution plan" referred to in these measures refers to the response plan proposed in advance by the bancassurance institution and approved by CBIRC and its dispatched agencies. The measures emphasize that the recovery and resolution plans should insist on using the institution’s own assets, shareholder assistance, and other market-oriented channels to raise funds to carry out self-rescue, to help strengthen the main responsibility and shareholder responsibilities of bancassurance institutions in risk prevention and resolution and to effectively prevent moral hazards. 

    In terms of the scope of application, “big to fail” and “small but easy to fail” are both “pain points” that should be considered and dealt with in recovery and resolution plans. The measures stipulate that institutions meeting certain thresholds should formulate recovery and resolution plans. After adjustments, depository financial institutions, financial asset management companies, and financial leasing companies whose on-balance sheet and off-balance sheet assets reach RMB 300 billion or more as well as the insurance (holding) groups and insurance companies whose total on-balance sheet assets reach RMB 200 billion or more shall formulate recovery and resolution plans. The above thresholds should be based on all consolidated data of the group and the scope of consolidation is determined in accordance with the scope of consolidation under the supervision of CBIRC. Recovery and resolution plans should separately consider the stress scenarios of a single bancassurance institution or its holding group and the entire financial system as well as consider the potential impact of cross-market, cross-industry, and cross-border risk transmission in crisis situations. If necessary, bancassurance institutions should adjust the assumptions of stress test scenarios or add additional stress scenarios. For global and domestic systemically important financial institutions, if other regulatory provisions exist regarding the recovery and resolution plans, those provisions shall prevail. Moreover, if the previously issued relevant measures are inconsistent with this measure, they shall be implemented in accordance with the provisions of this measure.

     

    Related Links (in Chinese)

    Effective Date: Promulgation Date

    Keywords: Asia Pacific, China, Banking, Insurance, Resolution Framework, Resolution Planning, Recovery Planning, Q&A, CBIRC

    Related Articles
    News

    PRA and FPC Finalize Changes to Leverage Ratio Framework in UK

    The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA

    October 08, 2021 WebPage Regulatory News
    News

    CFPB Proposes Rule on Small Business Lending Data Collection

    The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.

    October 08, 2021 WebPage Regulatory News
    News

    PRA Decides to Maintain O-SII Buffers for Another Year

    The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.

    October 08, 2021 WebPage Regulatory News
    News

    FSB Report Assesses Implementation of Recommendations on Stablecoins

    The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.

    October 07, 2021 WebPage Regulatory News
    News

    APRA Updates Loan Serviceability Expectations for Home Lending

    In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.

    October 06, 2021 WebPage Regulatory News
    News

    CPMI and IOSCO Consult on Guidance on Stablecoin Arrangements

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.

    October 06, 2021 WebPage Regulatory News
    News

    EBA and EIOPA Set Out Work Priorities for 2022

    The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.

    October 05, 2021 WebPage Regulatory News
    News

    MFSA Issues Reporting Updates and Guidance for Banks

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.

    October 05, 2021 WebPage Regulatory News
    News

    EC Publishes Decision on List of Equivalent Third Countries Under CRR

    The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).

    October 04, 2021 WebPage Regulatory News
    News

    EC Rule on Contractual Recognition of Write-Down and Conversion Powers

    EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.

    October 04, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7552