[NTDTV, Beijing time, September 14, 2022]The list of China’s systemically important banks in 2022 has been released recently. The outside world has noticed that Minsheng Bank’s ranking has been transferred to a lower group. Some economists said that this list reflects the order in which the central bank will rescue in an emergency. For ordinary savers, it is a reference indicator to measure the bank’s soundness and avoid risks as much as possible.
The People’s Bank of China and the China Banking and Insurance Regulatory Commission jointly announced the assessment results of China’s systemically important banks in 2022 on September 9. A total of 19 banks that were “too big to fail” were identified as domestic systemically important banks. Among them, there are 6 state-owned commercial banks, 9 joint-stock commercial banks, and 4 city commercial banks.
According to China Business News, the list is classified according to the systemic importance of banks, with the highest score in the fifth group and the lowest in the first group.
This year’s list shows: the fifth group with the highest score has no banks; the fourth group has 4 banks, namely Industrial and Commercial Bank of China, Bank of China, China Construction Bank, and Agricultural Bank of China; the third group includes: Bank of Communications, China Merchants Bank , Industrial Bank; the second group includes: China CITIC Bank, China Postal Savings Bank, Shanghai Pudong Development Bank; the first group includes: China Minsheng Bank, China Everbright Bank, Ping An Bank, Huaxia Bank, Ningbo Bank, China Guangfa Bank, Jiangsu Bank, Shanghai Bank ,Bank of Beijing.
The outside world has noticed that the ranking of Minsheng Bank has been lowered from the second group last year to the first group this year; although Shanghai Pudong Development Bank has not been lowered to the first group, its ranking in the second group has also dropped. This means that the two banks are less systemically important in the eyes of the CCP’s central bank.
In addition, compared with the list in 2021, there are still 3 joint-stock commercial banks that have not entered the list in 2022. The three joint-stock commercial banks are Bohai Bank, Zheshang Bank and Hengfeng Bank.
Yan Baogang, a senior financial media person, said in an interview with Radio Free Asia on September 13 that the main function of the ranking of systemically important banks is to examine the risks that the relevant banks may bring to the entire banking system if they go wrong. Since the financial tsunami, central banks around the world have drawn up relevant lists. It was only last year that the People’s Bank of China followed the international practice and published relevant lists and group rankings, showing the People’s Bank of China’s assessment of the operating conditions of each bank.
Yan Baogang said that this list is important news for investors and small depositors. “You can understand the stability of each bank from the relevant rankings.”
The Economist Commander further stated that in terms of macro-control, the CCP government’s idle funds have shrunk a lot compared to before, so it is forced to use its limited resources to the edge. Therefore, “the systematic ranking is also an order of banks’ current rescue in the Chinese government, that is to say, who will he (the Chinese government) rescue first”.
The commander said: “The Chinese government is now giving priority to guaranteeing bank capital needs starting from the four major banks, and the lower-ranked banks may not be as convenient and timely as before 2020 in terms of the convenience and timeliness of special rescue funds. So timely.”
He said that this ranking list has a certain reference value for ordinary depositors when they choose to deposit. Depositors can consider the importance and soundness of banks, so as to avoid losses caused by putting all eggs in the same basket.
(Comprehensive report by reporter He Yating/responsible editor: Lin Qing)
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