CBIRC Finalizes Rules on ECL, Proposes Rules on Regulatory Statistics
The China Banking and Insurance Regulatory Commission (CBIRC) issued the implementation rules on expected credit loss (ECL) approach of commercial banks. Additionally, CBIRC is consulting on the draft rules on regulatory statistics of banking and insurance sectors. The consultation is open until June 19, 2022.
The rules on ECL
- aim to standardize the internal control mechanism and management process for the implementation of the ECL approach of commercial banks and lay a solid foundation for the management of credit risk provisioning
- specify the responsibilities of the board of directors and its special committees, the board of supervisors, the senior management, the lead department and other relevant departments of commercial banks in the implementation and management of the ECL approach.
- require commercial banks to establish a complete management system for the ECL approach, set up a management team for implementing the ECL approach, develop relevant information systems, and strengthen the accumulation of historical data and information collection and maintenance for credit risks.
- stipulate commercial banks to improve the level of standardization and prudence in relevant procedures of the implementation process, such as credit risk exposure risk grouping, division of stages, model building, forward-looking adjustment, management adjustment, parameter management, and model verification.
- require all levels of regulatory agencies to supervise the management of the ECL approach by commercial banks through off-site supervision, on-site examination and other means; take corresponding regulatory measures to address the problems identified; and impose administrative penalties in accordance with the law.
The draft rules on regulatory statistics
- consist of provisions related to the authorities in charge of regulatory statistics, management on regulatory statistical investigation, management on regulatory statistical activities of banking and insurance institutions, and supervision on regulatory statistics.
- stipulate the requirements for unified management of regulatory statistics, define the responsibilities of the CBIRC department in charge of regulatory statistics, clarify the responsibilities of relevant departments of banking and insurance institutions, and set the boundaries of responsibilities for relevant parties.
- specify that the legal representatives or principal responsible persons of banking and insurance institutions shall assume the ultimate responsibility for the quality of regulatory statistical data.
- stipulate that banking and insurance institutions shall incorporate their regulatory statistical work into data governance.
Related Links (in Chinese and English)
- Press Release on Draft Rules on Regulatory Statistics
- Notice on Draft Rules on Regulatory Statistics
- Draft Rules on Regulatory Statistics (DOCX)
- Press Release on Rules on ECL
- Notice on Rules on ECL
Keywords: Asia Pacific, China, Banking, Insurance, ECL, Expected Credit Loss, Statistics, Credit Risk, IFRS 9, CBIRC
CECL adoption expert; engagement manager for loss estimation, internal risk capability enhancement, and counterparty credit risk management
CECL, IFRS 9, and IFRS 17 expert; credit risk and insurance risk specialist; strategic planning and credit analytics solutions consultant
Dieter Van der Stock
IFRS subject matter expert; LDTI subject matter expert; accounting authority; risk management specialist
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