Front Matter

Front Matter Page

© 2012 International Monetary Fund

April 2012

IMF Country Report No. 12/78

People’s Republic of China: Detailed Assessment Report: Observance of Basel Core Principles for Effective Banking Supervision

This assessment report was prepared by a staff team of the International Monetary Fund and The World Bank as part of the 2011 Financial Sector Assessment Program documentation. It is based on the information available at the time it was completed on March 2012. The views expressed in this document are those of the staff team and experts and do not necessarily reflect the views of the government of People’s Republic of China or the Executive Board of the IMF.

The policy of publication of staff reports and other documents by the IMF allows for the deletion of market-sensitive information.

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Front Matter Page

Financial Sector Assessment Program

PEOPLE’S REPUBLIC OF CHINA

BASEL CORE PRINCIPLES FOR EFFECTIVE BANKING SUPERVISION

DETAILED ASSESSMENT OF OBSERVANCE

MARCH 2012

International Monetary Fund

Monetary and Financial Systems Department

The World Bank

Financial and Private Sector

Development Vice-Presidency East Asia and Pacific Region Vice Presidency

Contents

  • Glossary

  • I. Summary, Key Findings, and Recommendations

    • A. Introduction

    • B. Information and Methodology Used for Assessment

    • C. Institutional and Macroeconomic Setting and Market Structure—Overview

    • D. Preconditions for Effective Banking Supervision

    • E. Main Findings

      • Objectives, independence, powers, transparency, and cooperation (CP 1)

      • Licensing and structure (CPs 2–5)

      • Prudential regulation and requirements (CPs 6–18)

      • Methods of ongoing banking supervision (CPs 19–21)

      • Accounting and disclosure (CP 22)

      • Corrective and remedial powers of supervisors (CP 23)

      • Consolidated and cross-border banking supervision (CPs 24–25)

    • F. Recommended Action Plan and Authorities’ Response

    • Tables

    • 1. Summary Compliance with the Basel Core Principles—Detailed Assessments

    • 2. Detailed Assessment of Compliance with the Basel Core Principles

    • 3. Recommended Action Plan to Improve Compliance with the Basel Core Principles

GLOSSARY

AMA

Advanced Measurement Approaches

AMC

Asset Management Companies

AML

Anti-Money Laundering

BCP

Basel Core Principles for Effective Banking Supervision

CAMELS

Capital Adequacy, Asset Quality, Management Quality, Earning, Liquidity, Sensitivity to Market Risk

CAMLMAC

China Anti-Money Laundering Monitoring and Analysis Center

CAR

Capital Adequacy Ratio

CBRC

China Banking Regulatory Commission

CCO

Chief Credit Officer

CDB

China Development Bank

CDD

Customer Due Diligence

CEOs

Chief Executive Officers

CFO

Chief Financial Officer

CIO

Chief Information Officer

CIRC

China Insurance Regulatory Commission

CPs

Core Principles

CPA

Certified Public Accountant

CPI

Consumer Price Index

CRO

Chief Risk Officer

CNAPS

China National Advanced Payment System

CSRC

China Securities Regulatory Commission

FATF

Financial Action Task Force

FIU

Financial Intelligence Unit

FSAP

Financial Sector Assessment Program

FSB

Financial Stability Board

FX

Foreign Exchange

HVPS

High Value Payment System

HKFRS

Hong Kong Financial Reporting Standards

IASB

International Accounting Standards Board

ICAAPs

Internal Capital Adequacy Assessment Processes

IFRS

International Financial Reporting Standards

IMF

International Monetary Fund

IRB

Internal Risk Based

IRRBB

Interest Rate Risk in the Banking Book

IT

Information Technology

KRI

Key Risk Indicators

KYC

Know Your Customer

LEADS

Large Exposure Analysis Database & System

LGFPs

Local Government Funding Platforms

LTV

Loan to Value

LVTR

Large-Value and Doubtful Transaction Reporting

MIS

Management Information Systems

MoF

Ministry of Finance

MOU

Memorandum of Understanding

NAO

National Audit Office

NDRC

National Development and Reform Commission

NPLs

Nonperforming Loans

NPS

National Payment System

OSS

Off-Site Surveillance

PBC

People’s Bank of China

RCSA

Risks and Control Self Assessment

REASS

Risk Early Warning Analysis Supporting System

RMB

Renminbi

ROA

Return on Assets

ROE

Return on Equity

ROSC

Report on Observance of Standards and Codes

RWA

Risk-Weighted Assets

SAFE

State Administration of Foreign Exchange

SMEs

Small and Medium Enterprises

SOE

Estate Owned Enterprise

SOX

Sarbanes-Oxley Act

STR

Suspicious Transaction Reporting

VAR

Value at Risk

People’s Republic of China: Detailed Assessment Report: Basel Core Principles for Effective Banking Supervision
Author: International Monetary Fund