The Rising Systemic Importance of Chinese Banks: Should the World Be Concerned?

International regulators use data on systemic importance for additional capital requirements for banks with cross-jurisdictional operations. Chinese banks' importance scores have risen significantly and China stands as the world's largest net creditor. Furthermore, commercial banks in China have recorded higher non-performing loans ratios across 2013-2015. Tracking systemic risk is a core activity in enabling macroprudential regulation. We focus on Chinese commercial banks and rank them as domestic systemically important banks (D-SIBs). We then identify those high ranking D-SIBs that are also global systemically important banks (G-SIBs). We investigate whether high ranking D-SIB/G-SIB banks have adequate capital and their interconnectedness.