China Sets New Risk Rating System for Foreign Bank Operations

China’s top bank regulator Tuesday unveiled rules to upgrade its risk rating system for foreign banks’ operations in the country, outlining criteria for risk management and access to the capital of their parent companies.

The new guidelines, which take effect immediately, spell out detailed factors and procedures adopted in the rating system, as well as regulatory responses to rating results, according to the China Banking and Insurance Regulatory Commission. The system is designed to better allocate supervisory resources and promote healthy development of foreign bank operations in China, the regulator said in a statement.