Another hot issue concerning the CBRC is bankruptcy rules for commercial banks. The regulator recently confirmed that it’s working out the details of bankruptcy rules and a deposit insurance scheme.
Once the two issues are implemented, depositors will not lose the full amount of their savings if a bank fails. Preliminary forecasts call for deposit insurance to be set at 500,000 yuan. That news triggered worries among depositors that certain banks may be in trouble, prompting some to distribute their money in different banks. But analysts say the worries are not necessary. That’s because most big banks in China are running smoothly under the supervision of the C-B-R-C and the P-B-O-C. The analysts do say, though, that while bank bankruptcies are tail risk events, some small-and-medium sized banks still face risks due to high interest rates promised to depositors.
Source: CCTV
