On January 7, 2012, the CBRC held the 2012 supervision working conference. The conference emphasized the importance of implement the guidance outlined by the Central Economic Work Conference and China National Financial Work Conference, summarized the supervisory work of 2011, analyzed the current banking reforms, development and risk control situations, and announced the working focuses in 2012. Chairman Shang Fulin attended the meeting and delivered a speech.

Chairman SHANG pointed out that the CBRC endeavored to defend the risk bottom line in the year of 2011 under the leadership of the CPC Central Committee and the State Council. The CBRC played a significant role in facilitating economic restructuring, keeping the national economy on the right track towards the macro-control targets, maintaining national economic and financial safety, and fending off risks rendered by global financial crisis.

In 2011, the banking sector strengthened prudent operations, enhanced its role in serving the real economy, optimized credit structure, and made continuous efforts to support small-and-micro enterprises as well as rural undertakings. As of end-November 2011, the total outstanding balance of small enterprise loans amounted to RMB10.5 trillion. The year-on-year growth rate reached 23.9 percent, 8.3 percentage points higher than the average growth of all loans. As of end-September 2011, the outstanding balance of agriculture-related loans reached RMB14 trillion, increasing by 26.2 percent compared with the same period of the previous year. Such growth was 9.4 percentage points higher than the average growth rate of all loans. 17 provinces have achieved full banking service coverage and have had enough access to banking institutions.

Chairman SHANG stressed that the year 2012 was of strategic importance to the reforms and development of China’s banking industry. In this year, China’s banking industry will be faced with more complex business environment, more fierce competition, higher social expectations and daunting supervisory challenges. The banking institutions should hold a holistic view and take swift actions to effectively seize opportunities and timely respond to challenges. They should prepare for the rainy day by making more thorough analysis of existing problems and working out better resolutions. They should firmly defend the risk bottom lines, better serve the real economy, accelerate the transformation of development mode, and enhance effective controls. Following this prudent roadmap, with several years’ endeavor, China’s banking sector will enter a new stage in its reforms, development and supervisory work.       

Chairman SHANG laid out the specific requirements on the supervisory work of the CBRC in 2012.  

1. Guarding against major risks and defending the risk bottom lines

The CBRC will make its risk prevention work better targeted and more forward-looking, attach great importance to the potential credit risks and liquidity risks, take proactive actions to curb banking violations of rules and regulations, control off-balance-sheet risks, and mitigate IT risks. To achieve these goals above, the CBRC should carry out works in a down-to-earth manner, ensuring that all the data collected are authentic, reliable and correct, and that all the assets are accurately classified.

2. Improving financial services and boosting scientific development of the real economy

The CBRC will optimize credit structure and credit mechanism to escalate economic restructuring and balanced regional economic growth in China in line with the requirements outlined in the 12th-five-year plan. Specifically, banks should provide more facilities to the emerging industry of strategic importance, energy conservation and environment prevention industry, high-tech industry, highly innovative industry, modern service industry and culture industry. The CBRB will formulate differentiated regulatory policies toward loans extended to small-and-micro enterprises as well as to agriculture, rural areas and farmers, so that commercial banks will be encouraged to offer more financial support to those areas. Meanwhile, the CBRC will promote financial innovation in a prudent and proactive manner, instructing the banking institutions to closely follow the demands of the market and enterprises, as well as the real economy, to increase effectiveness and cut cost, to make innovation and improve services, so as to provide better and more affordable facilities. The CBRC will also regulate the sales and fee-charging of financial products and services, and raise the public awareness of self-protection by means of education.

3. Deepening institutional reform and accelerating the transformation of development mode

The CBRC will continue to carry out the reforms on policy banks, postal savings banks, rural credit cooperatives and financial asset management companies. A set of improved or newly formulated regulatory standards will take shape and be issued, concerning the capital management of commercial banks, liquidity risk management, corporate governance and regulation of SIFIs, giving due considerations to both internationally prevailing practices and China’s realities. The CBRC will encourage, guide and standardize the equity participation of private sector in Chinese banking institutions with the purpose of improving corporate governance. China’s banking institutions will also raise their internal control capability and make a set forward in their opening-up.

4. Enhancing regulatory capability and raising the effectiveness of supervisory work

The CBRC will improve its regulatory capability and carry out scientific regulation to enhance the synergetic effect.

5. Enhancing team building and improving internal management

The CBRC will build an honest and clean team and fighting against corruption by intensifying ethics education and internal management.Chairman SHANG concluded that the CBRC would shoulder the responsibility, rise up to the challenges, strengthen confidence, and work tenaciously to achieve better regulatory results in 2012.  

The meeting was presided by the CBRC Vice Chairman CAI Esheng, attended by members of the party committee in the CBRC and heads of the supervisory boards in the state-owned major financial institutions, observed by heads of the CBRC headquarters and local offices.