(Bloomberg) -- Chinese authorities proposed to tighten supervision over its biggest lenders, calling for an annual review of the financial institutions deemed as systemically important.
The regulators, led by China’s central bank, on Tuesday released new draft rules setting out the annual release of a list of systemically important lenders as well as more details on their scoring system.
China is seeking to contain risks in the $43 trillion financial system as slowing growth has helped drive bad debt to levels not seen in 15 years. The government is cracking down on transgressions at small banks, which are the most vulnerable. It has been forced to seize a bank earlier this year and also bailed out others after earlier curbing the massive shadow banking system.
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The regulators will score commercial and policy banks based on metrics including their on- and off-balance sheet assets, interbank operations, branch network, wealth management assets, securities available for trading, and offshore debt. The list of names will be submitted to the Financial Stability and Development Committee, which is chaired by Vice Premier Liu He, by the end of every August.
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