CBRC Issued the Regulation on the Export-Import Bank of China

 

The Report of the 19th CPC National Congress stressed the necessity of deepening the financial system reform, enhancing the system’s capacity of supporting the real economy, improving the financial regulatory system, and forestalling systemic financial risks. In line with the spirit upheld by the Congress and to implement the plan on deepening policy banks reform, strengthen areas of weakness in the regulatory system, and prevent and resolve the financial risks under the new situation, the CBRC recently issued the Regulation on the Export-Import Bank of China (hereinafter referred to as “the Regulation”).

 

The Regulation was issued to meet the needs to deepen the reform of the Export-Import Bank of China (hereinafter referred to as “the Exim Bank”), further enhancing its regulation and supervision, and also to improve overall financial regulations and risk prevention and control.

 

The Regulation highlights the Exim Bank’s position as a policy financial institution to serve national strategies and instructs it to provide sound financial services for key and weak areas of national economic development. Meanwhile, the document emphasizes market-oriented operation and subjects the bank to general rules governing the banking industry.

 

The Regulation consists of 9 Chapters with 71 Articles: General Provisions, Market Positioning, Risk Management, Internal Control, Capital Management, Incentives and Restraints, Supervision and Administration, and Supplementary Provisions that cover major aspects of the Bank’s operation, administration and prudential regulation. The main aspects include: 1) the Bank should comply with its position as a policy financial institution, focus on policy-based operations and give full priority to facilitate foreign trade, opening-up, international cooperation and China’s export; 2) the Bank should build a corporate governance mechanism featuring scientific decision-making, robust implementation and effective supervision, with its Board of Directors, senior management staff and Supervisory Board be subject to qualification requirements; 3) the Bank should develop a comprehensive risk control and internal control system, in light of its own characteristics, to prevent and control risks including credit risks and country risks; 4) the Bank should build a sound capital mechanism, formulate effective plans for capital planning, and improve the processes of assessing internal capital adequacy and the mechanism of dynamic capital supplement; 5) the Bank should build a sound incentive and restraint mechanism and enhance internal accountability. Besides, CBRC will improve external regulation that any breach of the Regulation will be under prudential regulation and administrative penalty in accordance with the Law of the People’s Republic of China on Banking Regulation and Supervision.

 

The introduction of the Regulation is conducive to the Exim Bank to deepen its reform and the facilitation of it to become a sustainable policy bank with clear positioning, explicit business lines, adequate capital, standardized governance, tight internal control, secure operation and quality services. It will also improve the banking supervision and regulation system, strengthen the weak areas in the supervisory system and firmly uphold the rule-based regulation and supervision. While preventing and controlling financial risks, it will guide the Bank to play its part in maintaining stable growth, making structural adjustments, facilitating foreign trade and implementing the “go global” strategy.

 

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Copyright: China Banking Regulatory Commission
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