MNI: PBOC Sets New Rules to Control Systemic Financial Risks

     BEIJING (MNI) - The People's Bank of China (PBOC) on Tuesday released a new

regulation calling for tightened supervision over "systemically important

financial institutions" to prevent financial risks.

     As a policy framework, the new rules will cover commercial and policy

lenders, brokerages and insurers, and particularly target large-scale financial

institutions with complex structures and interconnected counterparties,

according to a statement on the central bank's website.

     Caixin reported today that more than 10 banks, four insurers, and  Internet

financial service providers may be recognized as Domestic Systemically Important

Financial Institutions (D-SIFIs) that will need to comply with the new

regulation. 

     The PBOC, together with the China Banking and Insurance Regulatory

Commission and the China Securities Regulatory Commission, will propose

additional requirement on the capital and leverage ratios of these financial

institutions, according to the regulation.

     The three regulators will conduct risk assessments and stress tests on

these institutions, and raise extra requirements based on the outcome, according

to the regulation.

     The PBOC said it will minimize the new regulation's immediate impact on the

financial industry and allow institutions to make transitional arrangements for

compliance.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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