Disclosure rules strengthened for the big lenders

The mainland's bank regulator will require its largest lenders to disclose their off-balance-sheet exposures and other indicators in a move to implement global rules designed to strengthen regulation of "too-big-to-fail" banks.

"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," the China Banking Regulatory Commission (CBRC) said on its website yesterday.

In 2011, the Financial Stability Board, the international body established by the Group of 20 countries to co-ordinate financial regulation among member countries, published its first list of systemically important financial institutions (SIFI) and required them to publish key indicators designed to gauge systemic importance. The latest guidance from the CBRC implements these global rules by requiring mainland banks that the FSB has designated as systemically important - as well as all other banks with on- and off-balance sheet assets worth at least 1.6 trillion yuan (HK$2 trillion) - to disclose 12 key indicators that track size, interconnectedness, complexity and other factors.

The indicators include the scale of on- and off-balance-sheet assets, claims on and liabilities to other financial institutions, nominal value of outstanding over-the-counter derivatives, assets held for both trading and available for sale, and cross-border assets and liabilities.

The FSB's latest list of SIFIs, published in November, included the mainland's first- and fourth-largest banks, Industrial and Commercial Bank of China and Bank of China.