银监法修订草案新增“整顿组”，风险处置框架更趋系统完善

Core Viewpoint - The revised draft of the Banking Supervision and Administration Law introduces a "restructuring team" to enhance the risk disposal framework, making it more systematic and comprehensive compared to the previous draft from three years ago [1][2]. Risk Disposal - The revised draft specifies that if a banking financial institution faces significant operational risks, the State Council's banking regulatory authority can dispatch a restructuring team to monitor the institution's operations and management activities [2]. - The restructuring team serves as an intermediary layer between early intervention and restructuring/takeover, thus forming a complete risk disposal framework that includes restructuring, rectification, takeover, and revocation [1][2]. - This approach enriches and refines preemptive risk control tools, allowing for early identification, warning, exposure, and disposal of risks [2]. Regulatory Context - The current Banking Supervision Law has been in effect since 2004, and the revision aims to address the lack of experience in handling risks, especially in small and medium-sized financial institutions [3]. - The revision aligns with the "14th Five-Year Plan" which emphasizes strengthening financial regulation and enhancing risk disposal resources and methods [3]. Market Dynamics - The People's Bank of China reported a significant reduction in high-risk small and medium-sized banks through various methods such as mergers and market exits, indicating a successful risk management strategy [3]. - The asset scale of "red zone" rural financial institutions is now less than 1% of the total assessed bank assets, reflecting improved stability in the banking sector [3]. Market-Based Solutions - State-owned banks have increasingly participated in the reform and risk management of small banks, including acquiring village banks and converting them into branches, which helps mitigate risks before they escalate to the point of takeover [4]. - The revised draft allows for more market-based solutions in the takeover process, including the delegation of management to other banking institutions and the implementation of debt-to-equity swaps [5]. Future Considerations - Future revisions of the Banking Supervision Law should ensure alignment with the upcoming Financial Stability Law and Financial Law [6].