CBIRC Clarifies Requirements for Large Risk Exposures of Foreign Banks
CBIRC published a notice on its decision to exempt foreign-funded corporate banks from the regulatory requirements for large-scale risk exposure of parent bank groups. CBIRC made this decision to integrate the current regulatory rules with international standards. The notice also mentions that CBIRC shall strengthen the monitoring of relevant data, make reasonable judgments based on the type of exposure and actual risk of transactions between foreign corporate banks and parent banking groups, and, if necessary, take supervisory measures as required. CBIRC issued the notice to further clarify the relevant regulatory requirements for large risk exposures of foreign banks to the parent bank group within the purview of the implementation of the measures for administration of large risk exposure of commercial banks, which were published by CBIRC in 2018.
CBIRC provides the following clarifications:
- The risk exposure of foreign-funded legal person banks to single inter-bank customers or group customers within the parent bank group is not subject to the regulatory requirements for large risk exposures stipulated in the measures for administration of large exposures.
- All banking and insurance regulatory bureaus shall supervise and urge foreign-funded corporate banks to effectively implement the main responsibilities of risk prevention and control and continue to do a good job in the corresponding risk management of the parent bank group's large risk exposure and the filling of related statements.
- The banking and insurance regulatory bureaus shall strengthen relevant data monitoring, make reasonable judgments based on the types of exposures and actual risk situations of transactions between foreign-funded legal person banks and parent bank groups, and promptly alert banks about abnormal changes or weak risk management capabilities. When necessary, supervisory measures such as conducting prudential discussions and issuing supervisory opinions can be adopted.
- All banking and insurance regulatory bureaus shall strengthen the supervision of related-party transactions, in accordance with relevant regulations, and strictly control the risks of unfair transactions and benefit transmission that may exist in transactions between foreign-funded legal person banks and parent bank groups.
- All banking and insurance regulatory bureaus shall continue to pay attention to the operation and management of the parent bank group of foreign-funded legal person banks, comprehensively consider the changes in the parent bank group's risk, and conduct a dynamic assessment of the risk isolation between the subsidiary bank in China and the parent bank group to prevent cross-border risk contagion.
Related Links (in Chinese)
Keywords: Asia Pacific, China, Banking, Large Exposures, Foreign Banks, Basel, CBIRC
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.