What’s new: China’s central bank and top banking industry regulator released a set of guidelines Thursday for assessing banks that should be deemed systemically important.
The document outlines how systemically important banks should be graded and sets requirements for their information disclosure. Banks with systemic importance will be selected from the country’s top 30 banks by assets including policy banks and commercial lenders as well as those that have been previously deemed systemically important, according to the document.
Regulators will grade the banks every year and submit a final list to the State Council's Financial Stability Board for approval, according to the document.
What’s the context: The latest document fleshes out details for assessing systemically important banks following the release in 2018 of a general regulation for financial institutions with crucial industry influence.
Chinese regulators have beefed up supervision of major financial institutions to catch up with international industry standards and contain financial risks. Five Chinese institutions including the four largest state banks and the Ping An Insurance Group are listed as global systemically important institutions.
Experts said about 20 banks are likely to be defined as systemically important in China under the latest rules, mostly banks with at least 2 trillion yuan ($305 billion) of assets.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).
