The People's Bank of China (PBOC), in collaboration with the National Financial Regulatory Administration, has released a list of 20 systemically important banks as part of its latest efforts to strengthen macro-prudential management and improve the supervision of these institutions. The announcement was made on Friday.
The identified institutions comprise six state-owned commercial banks, nine joint-stock commercial banks, and five urban commercial banks. The regulators have divided these banks into five groups based on their systemic importance, with the first group including ten banks such as China Everbright (OTC:CHFFF) Bank, China Minsheng Bank, Ping An Bank, Huaxia Bank, among others. The second group includes three establishments - China CITIC Bank, Shanghai Pudong Development Bank, and Postal Savings Bank of China. The third group comprises three entities: Bank of Communications, China Merchants Bank, and Industrial Bank. The fourth group includes four major banks: Industrial and Commercial Bank of China, Bank of China, China Construction Bank (OTC:CICHF), and Agricultural Bank of China (OTC:ACGBF). No banks were listed in the fifth group.
Systemically important banks are characterized by their large scale, high business complexity, strong correlation with other financial institutions, and their key role in providing services within the financial system. Their stable operation is crucial to the overall stability of the financial system.
The PBOC stated that it will work closely with the State Financial Regulatory Administration to ensure effective additional supervision of these systemically important banks. This will involve urging these institutions to meet the requirements for additional capital and leverage ratios as per regulations, enhancing their risk resistance capabilities and loss absorption capacity.
The joint efforts of macro-prudential management and micro-prudential supervision will be harnessed to promote the steady operation and healthy development of these systemically important banks. This is aimed at consolidating the foundation for the stability of the financial system and better supporting the development of the real economy.
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