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 practices。
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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