The China Banking and Insurance Regulatory Commission (CBIRC) has issued a notice on further improving the financial services for industries and enterprises in difficulty due to the COVID-19 pandemic. The notice sets out requirements for strengthening credit support, making continued financing arrangements, increasing the tolerance for non-performing loans (NPLs), continuously improving service efficiency, innovating credit service models, improving assessment and incentive mechanisms, and leveraging the risk protection function of insurance.
The notice highlights the following key points:
- Banking institutions should timely meet the reasonable and effective credit needs of industries and enterprises facing difficulties due to the pandemic and strive to achieve sustained and steady growth of loan balances in industries hit by the pandemic.
- Banks are encouraged to appropriately raise the tolerance for NPLs in relevant industries within a specific period of time during the pandemic and are required to optimize and adjust their assessment mechanism.
- Commercial banks and other financial institutions should continue to negotiate independently with micro, small and medium enterprises (including their owners), and self-employed individuals, based on the market principles, and make every effort to defer the loan principal and interest repayment for those in need. With regard to the deferred loans, financial institutions should make substantive risk judgment during the deferral period and should not downgrade the risk rating of such loans.
- Banking and insurance institutions should strictly implement various policies on financial service charges and are encouraged to increase the reduction or exemption of financial service charges in favor of industries and enterprises with temporary difficulties due to the pandemic.
- Regulatory authorities at all levels should take into account the changes of the pandemic situation and the impact on regional economy while working with relevant departments to issue regional financial support policies in due course.
Keywords: Asia Pacific, China, Banking, Covid-19, Basel, Credit Risk, Loan Repayment, Payment Deferrals, Lending, CBIRC
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)