China’s big banks have until 2025 to meet standards for loss absorbency laid down by the Financial Stability Board (FSB), a Switzerland-based body that seeks to promote global financial stability.
The country’s four lenders on the FSB’s list of the world’s too-big-to-fail banks have six more years than their peers from developed markets to reach total loss-absorbing capacity of 16 percent of risk-weighted assets, Bloomberg News reported.
Under the FSB’s original proposals, banks headquartered in emerging markets were to be exempted from total loss absorbing requirements.
In the final version of the standards published Monday, the institutions have been included to ensure that internationally active banks have a level playing field, the report said.
China’s top four state-owned banks are Industrial & Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank.
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