The FSB uses criteria such as size, interconnectedness and complexity to categorise institutions.

"If size is a criterion … then [Agricultural Bank] would naturally be so classified," said Joseph Yam Chi-kwong, a research fellow at the Institute of Global Economics and Finance and former chief executive of the Hong Kong Monetary Authority.

Agricultural Bank joins Bank of China and Industrial and Commercial Bank of China, the only other mainland banks on the list, both of which have growing yet still-small global networks which cater primarily to trade and project finance.

The FSB's list is divided into five buckets with each one denoting a capital buffer that the institutions should raise in addition to the 7 per cent capital adequacy ratio set out in Basel III.

Agricultural Bank landed in the first, or lowest, bucket along with banks such as Standard Chartered, which has 1,600 branches in 70 countries and aggressive investment banking businesses around the globe.

It is not hard to see why Standard Chartered would post an additional 1 per cent capital buffer to help stave off a liquidity shortage rippling through the global web of transactions and investments.

For Agricultural Bank, no such web exists - at least not on a global scale. But, with the addition of the traditionally rural, domestic lender, the FSB is likely acknowledging that a crisis on the mainland could be the next trigger for a systemic event the world over.

"There seems to be an increasing concern about the potential of a property implosion in China which would clearly drag in the larger Chinese banks and have residual knock-on affects globally," said Bradley Ziff, a senior risk adviser for financial software provider Misys. "It is therefore not surprising, given the criterion and reasoning, that more Chinese banks will be added in the future."

That is not to say the FSB is betting on a property collapse or banking crisis on the mainland. It is trying to pinpoint major players that have the weight to bring the system down.

Mainland property prices have been falling in most major cities for several months after years of rapid growth, heightening fears of a burst in what many economists have long called a real estate bubble.

China's economy slowed to 7.3 per cent year on year in the third quarter while disappointing economic indicators have continued to roll in.

Bad debt at Chinese banks has grown markedly since the beginning of the year as the economy cools from decades of rapid growth.

Just weeks before the FSB added Agricultural Bank to its list, the lender posted the highest rate of non-performing loans among the mainland's five biggest banks in the third quarter, with an NPL ratio of 1.29 per cent.

The mainland's sophistication in calculating risk lurking in this slowdown was on the "low end", Ziff said, something that had led the FSB to be more cautious when trying to appraise the risk at China's major - albeit still mainly domestic - financial institutions.

It is not just the FSB that is eyeing systemic risk in China. The International Monetary Fund and the World Bank this year have both pointed to rising risks at Chinese banks.

New York University's Volatility Laboratory in July said the cost of bailing out China's banks from a crisis was about US$520 billion, up four times over the past three years and nearly double the cost of a hypothetical bailout in the United States.

For now, the FSB might have to remain cagey on why it added Agricultural Bank because it wants to avoid causing a flight of deposits to so-called important banks at a time when China has yet to implement a deposit insurance scheme, said Grace Wu, a senior director of financial institutions at Fitch Ratings.

"The fact that they haven't given clear guidance on which banks are important could be because they don't want to say which banks aren't important," Wu said.

New Basel rules tighten banking capital

Global policymakers look set to finalise tougher new capital rules on asset-backed securities next month, just three months before defining banks' high-quality assets which may well then be granted better treatment in the future.

The Basel Committee on Banking Supervision is set to post final guidance on how to calculate capital charges for banks holding securitisation, and sources close to the talks said risk weight floors used as a starting point in the formula will remain near the 15 per cent level proposed last year.

At more than double the existing requirement, these levels would contrast starkly with the recent push behind the revival of the sector. Even more confusingly, they would ignore the incoming definition of Simple, Transparent and Comparable ABS that the Basel Committee itself is drawing up for March with IOSCO, the global securities standard-setter.

That definition is meant to serve as a basis to grant a better treatment to sounder and more straightforward ABS.

"The ultimate goal of the Basel/IOSCO taskforce is to come up with new approach to risk weighting, to feed into bank and insurer capital requirement, as well as liquidity rules," a source said.

Similar to the process undertaken by European regulators, Basel is set to relax its tough line on securitisation just months after publishing tough capital rules that are the product of years of stigma, and modelled on the worst-performing assets, US sub-prime.

In October, the European Banking Authority published its input on ABS that could qualify for more generous requirements, just days after tough final capital rules for insurers and liquidity rules for banks were posted.