The China Banking Regulatory Commission, China's banking regulator, intends to make life more congenial for foreign banks within its remit, while clamping down on abuses.

The big news for private banks, however, is that the CBRC's newly-announced plans to ease caps on foreign ownership in Chinese banks will exclude private banks. There will, however, be laxer controls for financial asset management companies and the regulator will apply non-discriminatory ownership limit rules.

The CBRC also says that it wants to:

• give foreign banks (including private banks) "wider commercial presence choices" in the interests of making China's financial system more diverse;
• broaden the business scope of foreign banks, removing the waiting period for conducting renminbi business, supporting foreign bank branches to engage in government bond-related businesses, loosening the renminbi retail deposit-taking requirement for foreign bank branches, and supporting foreign banks that want to conduct businesses in  financial markets; and
• refine regulatory rules to do with the working capital of foreign bank branches and change its approach to supervisory evaluation.

The CBRC is therefore calling for amendments to existing laws and regulations, along with improvements to prudential regulatory mechanisms.

The regulator has also issued new rules to contain counterparty default risks for derivative products. These rules will come into force on 1 January 2019.

Meanwhile, the CBRC has just set out its regulatory priorities for the year. According to Bloomberg, one of its three key priorities is to look into banks’ interbank activities (which might affect profitability) and wealth management businesses. It is also keen to inspect the funding sources of banks' shareholders to see whether any dirty money is being injected into bank ownership and to find out whether banks are complying with CBRC rules that retrict loans to various businesses.