China to Stress Test All 4,024 of Its Banks
What’s new: China’s central bank plans to expand its stress test regime to all of the country’s 4,024 banks (link in Chinese) this year to better prevent risks to the financial system, according to a central bank publication.
The People’s Bank of China (PBOC) aims to better identify high-risk banks and systemic risks through the stress tests, thus improving the effectiveness of risk monitoring and early warning systems, according to an article (link in Chinese) published earlier this week by China Finance, a magazine overseen by the PBOC.
The central bank will also work with other financial regulators to build up a prudential management framework on financial risks related to climate change, and conduct climate-risk stress tests in due course, the article said.
The background: The PBOC has been putting major Chinese commercial banks through stress tests since 2012. Last year, the PBOC tested 1,550 banks.
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