FINANCE

China’s Bank Resolution Regime Rated ‘Materially Non-Compliant’ by Global Watchdog

Published: Oct. 12, 2026 3:22 p.m. GMT+8

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The Chinese mainland’s bank resolution regime was rated “materially non-compliant” by the Financial Stability Board (FSB), which cited limited funding capacity and insufficient operational readiness for managing the failure of systemically important lenders.

The FSB’s thematic peer review, released Friday, assessed public-sector backstop funding mechanisms in 19 jurisdictions following the 2023 failures of U.S. regional banks and Switzerland’s Credit Suisse.

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FSB rated China mainland's bank resolution regime “materially non-compliant” due to limited funding and operational readiness.
The peer review followed 2023 U.S. and Credit Suisse bank failures; eight of 19 jurisdictions were rated materially non-compliant, while U.S., U.K., Japan, Hong Kong were fully compliant.
Weaknesses include limited deposit insurance and PBOC relending capacity, lack of funding exhaustion test and statutory creditor bail-in tool.

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Who’s Who

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What Happened When

Friday, October 9, 2026：: The FSB released its thematic peer review, assessing public-sector backstop funding mechanisms in 19 jurisdictions following the 2023 failures of U.S. regional banks and Switzerland’s Credit Suisse.

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