Emergency exits

28 November 2018 By Christopher Beddor

Regulators have published new guidelines for supervising key banks, insurers and brokers. Of course, Beijing owns most big banks and failures are rare. But indicating who should be saved means others may be allowed to sink: that’s a step towards liberalising a $40 trln industry.

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Chinese financial regulators on Nov. 27 published a new framework for supervising the country’s systemically important, or “too big to fail”, financial institutions. Officials will shortlist groups accounting for at least 75 percent of total assets in their respective sectors, or at least 30 banks, 10 securities companies and 10 insurers. It is unclear when those details will be made public.

The designated few will face tougher requirements on capital, leverage ratios and other forms of regulatory scrutiny, official statements said.

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