The risk management on “free-rider”, “capital concentration to the giant” and others by the administrative authority was escalated. The China Banking and Insurance Regulatory Commission ("CBIRC") has recently issued the Administrative Measures for Large Risk Exposures of Commercial Banks (the "Measures").

Consisting of 47 articles in six chapters, as well as another six appendices, the Measures specify the regulatory requirements on large risk exposures of commercial banks, set out the scope and method of calculation of risk exposure, provide for concrete requirements on commercial banks' endeavor to strengthen management and control over large risks from the perspective of the organizational structure, management rules, internal quota and information system, and specify regulatory approaches that may be adopted by regulators.

According to the responsible person of the relevant department of CBIRC, the Commission establishes the regulatory standards in consideration of the following three aspects:

(1) satisfaction of the current regulatory requirements;

(2) pressure of the domestic banks to meet with standards;

(3) reference to the international regulatory standards

(Source: Economic Information Daily)