RETAIL BANKING | Cesar Tordesillas, China

Bank of China faces challenges, opportunities as SIFI

Bank of China will face the challenegs after being named one of the systemically important financial institutions or SIFIs by the Financial Stability Board.

But the opportunity brought about by ther distinction outweighs the c hallenegs, according to deputy manager of the strategic development department of the BOC, Zong Liang.

The list of 29 SIFIs was announced in Cannes, France, that includes global banking giants such as Deutsche Bank and HSBC. The BOC was the only Chinese bank on the list.

The BOC will be seen as a more stable and reliable lender when the bank expands its future global businesses and investment, he said.

But experts said being listed also means stricter regulations and higher requirements.

At the Paris meeting of G20 finance ministers and central bank governors in October, SIFIs were required to increase an extra 1 to 2.5 percentage points in core capital adequacy ratio from the standard for ordinary banks

This would restrict the BOC's profit level and market expansion in the short term, said Guo Tianyong, director of the China Banking Research Center with the Central University of Finance and Economics.

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