China issues new loss-absorbing capacity rules for “too big to fail” banks
China issues new loss-absorbing capacity rules for “too big to fail” banks

China issues new loss-absorbing capacity rules for “too big to fail” banks

 

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Chinese regulators released draft rules governing its global systemically important banks’ (G-SIBs) loss-absorbing capacity in an effort to guard against risks to the country's massive financial system.

China's G-SIBs, referring to banks that are “too big to fail” whose failure could trigger a wider financial crisis, will be required to meet certain capital adequacy targets starting from 2025, according to a draft rules released by the People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) on Wednesday.

The banks must be able to absorb . . .

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