China Banking Regulatory Commission

Updated: 2006-11-14 14:18

China's banking regulatory body, the China Banking Regulatory Commission (CBRC), was established in Beijing in 2003. The establishment brought a halt to the dual roles that the People's Bank of China, China's central bank, had played as a financial supervisor and a currency policy-maker.

The main functions of the CBRC

Formulate supervisory rules and regulations governing the banking institutions;
Authorize the establishment, changes, termination and business scope of the banking institutions;
Conduct on-site examination and off-site surveillance of the banking institutions, and take enforcement actions against rule-breaking behaviors;
Conduct fit-and-proper tests on the senior managerial personnel of the banking institutions;
Compile and publish statistics and reports of the overall banking industry in accordance with relevant regulations:
Provide proposals on the resolution of problem deposit-taking institutions in consultation with relevant regulatory authorities;
Responsible for the administration of the supervisory boards of the major State-owned banking institutions; and Other functions delegated by the State Council;

The supervisory focuses of the CBRC
Conduct consolidated supervision to assess, monitor and mitigate the overall risks of each banking institution as a legal entity;
Stay focused on risk-based supervision and improvement of supervisory process and methods;
Urge banks to put in place and maintain a system of internal controls:
enhance supervisory transparency in line with international standards and practicesĄŁ

The regulatory objectives of the CBRC
a. Protect the interests of depositors and consumers through prudential and effective supervision;
b. Maintain market confidence through prudential and effective supervision;
c. Enhance public knowledge of modern finance though customer education and information disclosure;
d. Combat financial crimes.

The supervisory and regulatory criteria of the CBRC
a. Promote the financial stability and facilitate financial innovation at the same time;
b. Enhance the international competitiveness of the Chinese banking sector;
c. Set appropriate supervisory and regulatory boundaries and refrain from unnecessary controls;
d. Encourage fair and orderly competition;
e. Clearly define the accountability of both the supervisor and the supervised institutions; and
f. Employ supervisory resources in an efficient and cost-effective manner.

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