Featured Product

    CBIRC Finalizes Measures for Managing Large Exposures of Banks

    May 04, 2018

    CBIRC issued rules for the management of large-scale exposures of commercial banks, with July 01, 2018 as the effective date. The rules are intended to prevent and control concentration risk in the Chinese banking sector. These rules are in line with the supervisory framework for measuring and controlling large exposures, which the BCBS issued in April 2014.

    The large-scale exposures framework includes chapters on general provisions, regulatory requirements for large exposures, calculation of risk exposures, management of large exposures, supervision and administration, and by-laws. The appendices cover customer identification method, specific risk exposure calculation method, trading account risk exposure calculation method, off-balance-sheet project credit conversion coefficient, qualified material and qualified guarantee range, and phased transitional compliance requirements. The measures stipulate the scope and methods for the calculation of risk exposure and set requirements for commercial banks to strengthen “large-scale risk management” in terms of organizational structure, management systems, internal limits, and information systems for business.

    The rules stipulate that exposure of a commercial bank to a single customer in the same industry or a group customer shall not exceed 25% of the net value of tier 1 capital. The risk exposure of a global systemically important bank to another global systemically important bank may not exceed 15% of the net tier 1 capital. The liquidation risk exposure of commercial banks to a single qualified central counterparty is not subject to the large-scale risk exposure supervision requirements stipulated in the present rules and the non-liquidation risk exposure may not exceed 25% of the net value of tier 1 capital. Moreover, the risk exposure and non-liquidation exposure of a commercial bank to a single unqualified central counterparty shall not exceed 25% of the net value of tier 1 capital.  


    Related Links

    Effective Date: July 01, 2018

    Keywords: Asia Pacific, China, Banking, Concentration Risk, Large Exposures, CBIRC

    Related Articles
    News

    EIOPA Forms Consultative Expert Group on Digital Ethics in Insurance

    EIOPA established the Consultative Expert Group on Digital Ethics in Insurance to assist EIOPA in the development of digital responsibility principles in insurance.

    September 17, 2019 WebPage Regulatory News
    News

    FASB Proposes Taxonomy Changes Related to Topics 848 and 470

    FASB proposed taxonomy improvements for the proposed Accounting Standards Update on topic 848 on facilitation of effects of reference rate reform on financial reporting.

    September 16, 2019 WebPage Regulatory News
    News

    BoE Statement on Recalculating Transitional Measures Under Solvency II

    BoE notified that it will be willing to accept applications from firms to recalculate transitional measure on technical provisions (TMTP) as at September 30, 2019.

    September 16, 2019 WebPage Regulatory News
    News

    BIS Hosts Conference to Discuss Issues from Emergence of Stablecoins

    BIS hosted a conference in Basel to discuss policy and regulatory issues posed by the emergence of stablecoin initiatives backed by financial institutions and large technology companies.

    September 16, 2019 WebPage Regulatory News
    News

    BIS Paper on Embedded Supervision of Blockchain-Based Financial Market

    BIS published a working paper that investigates ways to regulate and supervise blockchain-based financial markets.

    September 16, 2019 WebPage Regulatory News
    News

    BoE Paper on Market-Implied Systemic Risk and Shadow Capital Adequacy

    BoE published a working paper that presents a forward-looking approach to measure systemic solvency risk.

    September 13, 2019 WebPage Regulatory News
    News

    HKMA Consults on Policy Module on Pillar 2 Supervisory Review Process

    HKMA is consulting on the revised Supervisory Policy Manual module CA-G-5 that sets out the HKMA approach to conducting the supervisory review process under Pillar 2.

    September 13, 2019 WebPage Regulatory News
    News

    PRA Publishes Waiver by Consent of Continuity of Access Rules

    PRA published a new waiver by consent to waive the Continuity of Access requirements contained in the Depositor Protection Part of the PRA Rulebook (DPP).

    September 13, 2019 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: Second Update for September 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to three questions.

    September 13, 2019 WebPage Regulatory News
    News

    BoE Publishes Update on Meeting of Working Group on Risk-Free Rates

    BoE published the minutes of the July meeting of working group on sterling risk-free reference rates.

    September 13, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3827