CBIRC and PBC Publish Regulations for Systemically Important Banks
The China Banking and Insurance Regulatory Commission (CBIRC) and the People's Bank of China (PBC) have published additional regulations on systemically important banks, which shall come into force on December 01, 2021. The key provisions included in the regulations cover additional regulatory requirements, recovery and resolution planning, and prudential supervision. CBIRC published a set of questions and answers on these additional regulations as well as the list of nineteen banks of systemic importance.
The regulations clarify the requirements for additional regulatory indicators, including additional capital and additional leverage ratios. According to the regulations, systemically important banks have been divided into five groups. Banks in the first to fifth groups are subject to additional capital requirements of 0.25%, 0.5%, 0.75%, 1%, and 1.5%, respectively. The additional leverage ratio requirement is 50% of the additional capital requirement of systemically important banks. The regulations also clarify the requirements for recovery and resolution planning. Systemically important banks shall formulate group-level recovery and resolution plans and submit them, for review, to the crisis management team led by PBC. The regulations clarify the requirements for prudential supervision, including information related to reporting and disclosure, risk data aggregation and risk reporting, and corporate governance requirements.
Additionally, CBIRC and PBC have released the list of domestic systemically important banks (D-SIBs) in China and have identified nineteen systemically important banks in China based on 2020 data. These nineteen systemically important banks include six state-owned commercial banks, nine joint-stock commercial banks, and four city commercial banks. CBIRC and PBC have divided these banks in five groups:
- First group includes Ping An Bank, China Everbright Bank, Hua Xia Bank, China Guangfa Bank, Bank of Ningbo, Bank of Shanghai, Bank of Jiangsu, and Bank of Beijing
- Second group includes Shanghai Pudong Development Bank, China CITIC Bank, China Minsheng Bank, and China Postal Savings Bank
- Third group includes Bank of Communications, China Merchants Bank, and Industrial Bank
- Fourth group includes the Industrial and Commercial Bank of China, Bank of China, China Construction Bank, and Agricultural Bank of China
- No banks have entered the fifth group
Related Links (in Chinese)
- Press Release on Additional Regulations
- Additional Regulations
- Q&A on Additional Regulations
- Press Release on List of D-SIBs
Effective Date: December 01, 2021
Keywords: Asia Pacific, China, Banking, Regulatory Capital, Leverage Ratio, Resolution Framework, D-SIBs, Resolution Planning, Basel, Systemic Risk, PBC, CBIRC
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