PBC issued the financial stability report (2018) on China. The report assesses the soundness of financial system in the country since 2017. The report concluded that resilience of financial system was further enhanced and financial operations were generally stable during the observation period. However, in the coming days, risk factors that could affect and undermine the global financial stability are mounting. Domestically, the cyclical, institutional, and structural problems, along with the risks that have built up over years in the economic and financial system, in China have started to show while the structural problems in economic performance remain prominent.
The report reveals that major policies and top-level structure for reform and development have been established. The Financial Stability and Development Committee of the State Council, which was established at the end of 2017, was further enhanced and improved with adjustments to the regulatory structure. Under the new structure, the coordination mechanism for financial regulation was strengthened; the philosophy and framework of macro-prudential management with the central bank at the core were gradually established; and the mechanism for preventing systemic risks was further enhanced. Overall, the economic and financial risks in the country can be broadly contained with little possibility of systemic financial risks. The report further notes that looking into 2019, large uncertainties still exist in the global economy and financial market. In the course of China’s economic transition and structural adjustment from high-speed growth to high-quality growth, there are still possibilities of the emergence of “grey rhino” financial risks.
Keywords: Asia Pacific, China, Banking, Financial Stability Report, Systemic Risk, PBC
Previous ArticleEBA Consults on Guidelines for Managing Non-Performing Exposures
Next ArticleFED Publishes Updated Form FR Y-9C and Instructions
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).
EBA updated the list of other systemically important institutions (O-SIIs) in EU.
BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.
UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.
PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.
MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.
ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.