Bank Regulators Try Tailoring Bad-Debt Risk

China's banking regulator has proposed replacing one-size-fits-all standards for bad-debt provisions with a flexible – and subjective – system in which provisioning would be customized for each commercial bank.

A risk management official at a major bank told Caixin the China Banking Regulatory Commission (CBRC) is looking into ways to set different provision ratio requirements according to the quality of each bank's loan portfolio.

The goal is to improve risk management and settle regulatory concerns that bankers, especially executives at regional branches, have been too loose with risk rating and reporting.