The CBRC held 2012 Large Bank Supervisory Work Conference

From January 11th to 12th, the CBRC held the 2012 large bank supervisory work conference in Beijing, which reviewed the developments and supervisory progress of large banks in 2011, analyzed the latest situation and challenges facing large banks’ reform, development and supervision, and outlined the supervisory focuses in 2012. Chairman SHANG Fulin attended and addressed the meeting, while Vice Chairman ZHOU Mubing presided the conference.

The conference reviewed and acknowledged the developments and supervisory progress of large banks in 2011. Firstly, the offsite surveillance system featuring CARPLES risk indicators framework was fully implemented. While CARPLES framework was incorporated into the internal assessment mechanism of banks, the assessment was conducted both on a solo and consolidated basis, together with the application of systemic supervisory benchmark. Secondly, corrective work was further promoted to sort out lending to Local Government Funding Platforms (LGFP), with both dynamic monitoring and on-site examination undertaken to cross-check the bottom line and mitigate risks. Thirdly, broad examinations on compliance of credit extension were carried out, with a series of problematic loans being resolved and violations of rules being addressed. Fourthly, the licensing work was further improved, including the optimization in licensing procedures and other services. Fifthly, banks’ sound operations were further emphasized. The corporate governance was further enhanced by intensifying supervision of the performance of directors, while banks’ risk management capabilities further strengthened by conducting assessment on banks to implement Basel II. Last but not least, banks were guided to better serve the real economy through implementing new rules on loan disbursement, improving financial services and stepping up credit support to major national projects and micro-business.

Meanwhile, the conference gained consensus that the year 2012 will continue to be denominated by lackluster global economic growth and daunting challenges facing domestic economy. As the major player of the banking sector, large commercial banks are expected to adjust its growth rate, better implement new rules of loan disbursement, gradually mitigate risks, promote business model transfer and improve financial services along the way.

The conference outlined the concrete supervisory work of large banks in 2012. First is to give full play to on-site examination to identify and mitigate major risks, including credit, market and operational risks, while at the same time to guide banks to perform dynamic stress tests. Second is to take advantage of implementing new international regulatory rules to enhance the supervision on systemically important banks (SIBs). CARPLES framework should be integrated into the supervision of SIBs so as to improve the consolidated  supervisory capability and improve crisis management contingency planning. Third is to urge banks to establish risk review compliance planning and capital replenishment measures in the process of implementing Basel II. Fourth is to accelerate the issuance of guidelines on banks performance assessment, call banks to establish sound annual operational planning and improve performance assessment mechanism. Fifth is to require banks to better serve the real economy through implementing national supporting rules on micro-business and rural undertakings, sorting out fee-charging banking activities and promoting banking innovation.

The conference was attended by director-generals of all the CBRC supervisory departments, local offices, and chairmen, presidents, chairmen of supervisory board and other senior executives of five large commercial banks.