Updated: June 12, 2012 (Initial publication: June 5, 2012)

Breaking news

The China Banking Regulatory Commission (CRBC) had set a deadline of the end of May 2012 a completion of self-assessment by five Chinese banks of State for bad debt.

A Chinese economic newspaper revealed, by an anonymous source, that the Chinese banking regulator, ordered end of 2011, five first Chinese financial institutions to proceed in the determination and the quality of loans granted, so they rank their bad debt. The control by the regulator through the self-assessment will be made from end of May 2012.

© thejournalofregulation


China is building an economy which, without being competitive, will be capitalist. To do this, it establishes both banking and financial regulations that capital flowing and circulate, by these two circuits of banks and financial markets. Regulators are responsible of this closely with them.

In a vast country whose power posed that it remains centralised, regulation is also a way to ensure that it comes about. A few weeks ago, a series of projects have been established by the financial regulator to build the rules of regulation and Governor of a financial market, under the standards of capital markets of mature markets.

On 27 May 20012, the China Business News site affirmed to hold to an anonymous source "close to the banking regulatory authority" the fact that a few months ago, the China Banking Regulatory Commission (CRBC) asked the major lenders of State to consider the quality of their loans to some of them the existence and quality of their bad debt. This is part of a more general injunction of the regulator to these five more major State banks to review the authenticity and the accuracy of the classification of all of their loans starting in late 2011.

The regulator has set to end May 2012 the control of this self-assessment conducted immediately by banks, as required by the China Banking Regulatory Commission (CRBC).Through this information, it is in the first place that as we might have guessed that the regulation in China, will give less space to the transparency in other regulated systems.

Observed in second place, and this is true regardless of whether the country, when we are in bank regulation and not financial, regulation is more secret and is often based on confidential reports between the regulator and banks rather than on the principle of information of market. Furthermore, the regulator has not sent inspectors to assess establishment accounts at stake, certainly systemic and in which it is "money of the State itself issues that are at stake (no one knows if it is "State-shareholder" or "the State-regulator" who speaks).

It conducts; with a custom model that by internalising the regulation: he asked institutions to seek the information then, it controls how this control work will have been done. In China as elsewhere, regulation and compliance, external contraol and internal control now converge.


your comment