China keeps pushing foreign banks' local incorporation

China will continue to promote the local incorporation of foreign banks in the country, China's banking regulator was quoted as saying on Thursday.

China Banking Regulatory Commission (CBRC) asked the locally incorporated foreign banks to separate themselves from their parent banks and remaining Chinese branches, and at the same time, the CBRC also urged them to build independent risk control, accounting and IT system to prevent overseas risk overflow, according to the statement published on the CBRC's website.

In the statement, the CBRC said they will pay attention to the branches and subsidiary institutions of the subprime-affected foreign banks, and take more prudent supervision measures.

The foreign institutional investors have been allowed to invest in Chinese banks since 1996, and 35 overseas banks have acquired stakes in 23 Chinese banks by October last year, with a total investment of US$21 billion.