On 15 Oct. 2021, the People’s Bank of China (PBC) and China Banking and Insurance Regulatory Commission (CBIRC jointly) published the “Regulations on Additional Supervision of Systemically Important Banks (For Trial Implementation)” (hereinafter “the Regulations”,系统重要性银行附加监管规定(试行)), which shall come into effect on 1 Dec. 2021.
The Regulations aims to complete the last piece of the puzzle of the systemically important banks regulatory system, so as to maintain the stability of the financial system.
Systemically important banks refer to the financial institutions featuring large size, high structural and operational complexity, and strong linkages with other financial institutions, which provide such critical services in the financial system that they become almost irreplaceable. Their failure to survive a substantial risk would cause significant disruption to the financial system and the real economy.
On the same day, the PBOC and CRIBC unveiled a list of 19 banks deemed to be systemically important banks, which were divided into five groups by the descending order of importance.
The First Group (8): Ping An Bank, China Everbright Bank, Hua Xia Bank, China Guangfa Bank, Bank of Ningbo, Bank of Shanghai, Bank of Jiangsu, Bank of Beijing;
The Second Group (4): Shanghai Pudong Development Bank, China Citic Bank, China Minsheng Banking Corp, Postal Savings Bank of China;
The Third Group (3): Bank of Communications, China Merchants Bank, Industrial Bank;
The Fourth Group (4): Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China;
The Fifth Group is empty at this point.
Cover Photo by Ralf Leineweber on Unsplash
Contributors: CJO Staff Contributors Team