Sign up for regular news, views and insights about corporate governance

Name
Email
Company
Job title
Industry

Close

Setting the benchmark in corporate integrity

China orders major banks to increase disclosure

China's banking authorities have introduced new laws requiring major mainland banks to disclose information on 12 key indicators
The China Banking Regulatory Commission (CBRC) has ordered major banks to disclose information on 12 key indicators set out by the Basel Committee

China’s banking authorities have introduced new laws requiring major mainland banks to disclose information on 12 key indicators

On January 8 the China Banking Regulatory Commission (CBRC) ordered major Mainland banks to disclose information on 12 key indicators outlined by the Basel Committee. The new rules apply to commercial banks whose assets exceeded 1.6trn yuan at the end of last year, as well as those labelled global systemically important banks (G-SIBs). The new rules signal an effort on the part of Chinese authorities to curb concerns surrounding rising national debt, and an attempt to reduce the overall percentage of non-performing loans. Put crudely, the rules – which have come into immediate effect – look to improve governance and transparency for a banking sector that has too often fallen foul of a bad reputation.

The new rules signal an effort on the part of Chinese authorities to curb concerns surrounding rising national debt

“In recent years, the scale, interconnectedness, and complexity of Chinese banks has continuously increased, and it is necessary to implement higher standards for banks whose degree of systemic importance is relatively large,” wrote the CBRC on its website, January 8.

The 12 key indicators include the disclosure of cross-border assets and liabilities, off-sheet assets, liability claims relating to financial institutions, available trading assets, assets available for sale, and outstanding over-the-counter derivatives, to name a few. Whereas the vast majority of the new CBRC measures will require little change, given that many are already disclosed by those affected, some will force certain banks to instigate fundamental changes to their disclosure policies and improve upon their transparency by quite extraordinary degrees.

According to the new rules, the banks must disclose the relevant information either within four months of their accounting year ending or no later than the end of July.

After having lent out vast sums of money in order to maintain China’s sky-high GDP growth, some fear that certain unwise and ultimately unrecoverable investments may be being hidden. The CBRC’s newly enforced rules, however, will ensure that regulatory authorities can keep a close watch on the country’s leading banks and protect against bad loans.

 

News

Diversity: missing the wood for the trees?

Much has been made of the lack of women on boards recently. But positive discrimination has it’s flaws, writes Melanie Wadsworth

Shareholders reject Julius Baer pay report

Disgruntled shareholders at Swiss private bank vote to reject remuneration report at annual meeting

Gunaxi: Bribe or gift?

The efforts of multinational companies to do business in China is marred by the tradition of Gunaxi – the concept of courting clients and networking that traditionally involves gift giving

SASB set ambitious targets for reforming sustainability reporting

Sustainability advocate SASB is aiming to transform the way a number of core US industries report on their environmental and social practices

IASB publish the ‘Red Book’

The International Accounting Standards Board (IASB) has announced the availability of the 2013 edition of the Bound Volume of International Financial Reporting Standards (IFRS)

UK’s FRC rejects calls for compulsory audit rotation

Despite pressure to encourage greater competition in the UK’s accounting market, regulator waters down its proposed rule changes

Podcast information and links

Podcast subscription information below

EU outlines new disclosure guidelines for extractive industries

Newly introduced laws are to ensure resource-rich nations are less so made subjects of exploitation, requiring for a much greater extent of transparency among extractive industries

British banks’ comedy of terrors

Recent banking fiascos have proved that British officials struggle to revive failing banks or produce meaningful reform, even if they haven’t noticed it themselves yet, writes Simon Johnson

New corporate governance guidance published

The QCA has published a new guidance code for SMEs, focusing primarily on delivering long-term shareholder value

EU seek bloc-wide corporate governance laws

The European Corporate Governance and Company Law Conference looks to somewhat bolster shareholders’ duties and rights across the EU in protecting against corporate misgivings

ASEAN governance framework established

The results of the first-ever ASEAN Corporate Governance Scorecard have been released, in an effort to establish greater international visibility