China's National Financial Regulatory Administration has revised its market risk framework by replacing the existing guidance with the Measures for Market Risk Management of Commercial Banks, effective from the date of issuance. The measures comprise five chapters and 43 articles and clarify the definition and scope of market risk by removing interest rate risk in the banking book and aligning with the Administrative Measures for the Capital Management of Commercial Banks and the Guidelines on Comprehensive Risk Management for Banking Financial Institutions. They also strengthen governance expectations by specifying the responsibilities of the board of directors, supervisors and senior management, defining the scope and duties of the three lines of defence, and requiring enhanced market risk management at the consolidated group level. Banks are required to implement end-to-end market risk management, including more detailed requirements for risk identification, measurement, monitoring, control and reporting, alongside updated expectations for internal model governance and stress testing. The authority plans to step up supervisory guidance to support implementation and to promote improvements in banks’ market risk management capabilities.
China Banking and Insurance Regulatory Commission 2025-06-20
China's National Financial Regulatory Administration issues new measures for commercial banks’ market risk management
China's National Financial Regulatory Administration has issued the Measures for Market Risk Management of Commercial Banks, replacing previous guidance. The measures clarify market risk definitions, align with existing capital management and risk guidelines, and enhance governance by detailing responsibilities and requiring comprehensive risk management. The authority will increase supervisory guidance to aid implementation and improve banks' risk management capabilities.