CBIRC Clarifies Derivatives Rules, Notes Progress in Bank Governance
The China Banking and Insurance Regulatory Commission (CBIRC) published a Notice on application of rules related to derivatives counterparties, guiding opinions in support of technological innovations, and an update on the status of corporate governance in the banking and insurance sectors. The recently published Notice contains supplementary information for the application of the rules for measurement of default risk assets of derivatives counterparties. The rules stipulate that "qualified transactions between commercial banks and financial institutions can manage risk exposures and withdraw capital on a net basis." The Notice also aims to clarify the scope of the qualified master agreement and improve the "identification standards for margin derivatives transactions."
In another development, CBIRC published “Guiding Opinions on Supporting High-level Technological Self-reliance in the Banking and Insurance Industry,” along with the associated questions and answers (Q&A).In the "Guiding Opinion," CBIRC calls for more financial support for technological innovations. CBIRC also notes that it is necessary to explore new models of technological credit services and encourage the use of more flexible interest rate pricing and interest repayment methods, also stating that the regulator will actively support the direct financing of technology companies.
Finally, in the statement on corporate governance, CBIRC explained that it has achieved improvements in corporate governance in the banking and insurance sectors. In the past two years, CBIRC has steadily promoted the implementation of "Three-year Action Plan for Improving Corporate Governance in the Banking and Insurance Industry (2020-2022).” The regulator has focused on strengthening the development of regulations, continuously deepening the reform of corporate governance, effectively preventing and resolving financial risks, and promoting the steady improvement of the quality of corporate governance in the banking and insurance industry. Going forward, CBIRC plans to further strengthen supervision and reform the corporate governance of institutions by regulating the behavior and related transactions of major shareholders, optimizing the structure and operation mechanism of the board of directors, and improving the effectiveness of supervision.
Related Links (in Chinese)
- Press Release on Rules Related to Derivative Counterparties
- Q&A on Rules Related to Derivative Counterparties
- Press Release on Guiding Opinion
- Guiding Opinion
- Q&A on Guiding Opinion
- Statement on Corporate Governance
Keywords: Asia Pacific, China, Banking, Derivatives, Regulatory Capital, Default Risk, Counterparty Credit Risk, Master Netting Agreement, Netting Contract, Fintech, Governance, 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.
Nick Jessop
Scenario modeling expert; risk management specialist; quantitative financial modeler
Previous Article
BoE Publishes Policy Statement on Approach to Setting MRELRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
