Chinese megabanks set to lose out in switch to SMA

Bank of China, ICBC likely to see lower reductions in operational risk capital due to reliance on interest income

Photo of ICBC and BoC
Bank of China and ICBC: two of China’s Big Four banks with SMA concerns
Infopro montage

China’s four megabanks are set to be among the losers from the switch to a new method of calculating operational risk capital, due to the approach’s comparatively punitive treatment of banks that rely on interest income to generate revenue.

While some of the world’s largest banks are in line for an estimated 30% drop in operational risk capital requirements under the new approach, according to a quantitative impact study, China’s ‘Big Four’ are expected to see smaller reductions.

“[That

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: