The approaching capital requirements deadline for the largest banks is approaching and China’s largest financial institutions are weighing up how to best increase their buffers.
China’s four largest state-owned banks — Bank of China, China Construction Bank, Industrial and Commercial Bank of China and Agricultural Bank of China — are classified globally significant, or G-SIBs. Under solvency regulations applied by the People’s Bank of China, the G-SIBs are required to have a minimum total loss absorbing capacity (TLAC) of 16% of their risk-weighted assets by 2025, and 18% by 2028.
