CBRC Issued the Guiding Opinions on Risk Prevention and Control of Banking Industry

 

To implement the decisions of the State Council, further strengthen financial supervision as well as prevent and mitigate risks in banking industry, China Banking Regulatory Commission (CBRC) has recently issued the guiding opinions on risk prevention and control of banking industry(hereinafter referred to as “the guiding opinions”). Thus, risk prevention and control of banking industry would be further intensified throughout the country to effectively resolve key risk assets and eliminated potential risks in order to defend the bottom line of no systemic risks.

 

The guiding opinions clarified the objectives and principles of risk prevention and control of banking industry. Banking institutions ought to carry out the requirements raised during the central economic working conference, follow the basic principles of bottom-line mindset, classified strategies, prudential implementation and resolutions of both the symptom and the root, put financial risks prevention and control in a more important position, effectively mitigate current prominent risks and defend the bottom lines of no systemic risks.

 

The guiding opinions made clear the key fields of risk prevention and control of banking industry. These key fields basically cover main categories of risks in banking industry, not only traditional risks, such as credit risk, liquidity risk, real estate risk, default risk of local government debts, etc, but also non-traditional risks, such as bond market fluctuation risk, risk of cross-sector financial product, internet financing risks and external shock risk.

 

The guiding opinions require that each banking institution should shoulder its responsibility of risk prevention and control, implement the top management accountability mechanism, formulate feasible and targeted plans and strictly promote self-examination and rectification. It required that regulatory institutions at any levels should fulfill their responsibilities, and conduct timely supervision. Institutions that violated laws and regulations with no proper self-rectification shall be held accountable.

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Copyright: China Banking Regulatory Commission
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