On 16 May 2014, the Notice on Regulating Interbank Business of Financial Institutions (“Notice No. 127”) jointly issued by the People’s Bank of China (PBOC), China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), China Insurance Regulatory Commission (CIRC) and State Administration of Foreign Exchange (SAFE) was released on the PBOC’s official website. On the same day, the Notice of the General Office of the China Banking Regulatory Commission on Regulating the Governance of Interbank Business of Commercial Banks (“Notice No. 140”), a supporting policy document for Notice No. 127, was released on the CBRC’s official website.
The two notices help establish a preliminary regulatory framework for governing interbank activities among financial institutions in China and tackle problems including irregular development of interbank business, supervision and regulation evasion, maturity mismatch, and inadequate disclosure of information. This report presents an interpretation of the new interbank regulations.