On Friday, China’s banking and insurance regulator proposed rule changes that would allow Chinese banks to petition a court to be declared bankrupt (Nov 11).
In a statement, the China Banking and Insurance Regulatory Commission (CBIRC) said that the watchdog’s different ideas are meant to reduce financial risk and help the banking industry grow in a good way.
The proposed changes also explain how regulators could take over troubled financial institutions to make it easier to do things like put more money into them or restructure their ownership.
In the past few years, there have been a number of high-profile scandals at smaller banks like Baoshang Bank, which was taken over by the government in 2019 and later declared bankrupt. As a result, Beijing has increased its oversight of the sector.
The proposed rule changes would make it clear how these kinds of things should be done.
As part of China’s plans to tighten control over data security, the draft rules also said that China’s banks shouldn’t give business-related documents, materials, and data to parties outside of China.
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