In order to further promote commercial banks to accurately identify and evaluate credit risks and truly reflect asset quality, the China Banking and Insurance Regulatory Commission and the People's Bank of China jointly formulated the "Measures for the Classification of Financial Assets Risks of Commercial Banks" (hereinafter referred to as the "Measures"), and was officially released recently.

A perfect risk classification system is the premise of effective prevention and control of credit risks. In 1998, the People's Bank of China issued the Guiding Principles for Loan Risk Classification, which proposed the concept of five-level classification. In 2007, the former CBRC issued the "Loan Risk Classification Guidelines" (hereinafter referred to as the "Guidelines"), which further clarified the five-level classification regulatory requirements. In recent years, the asset structure of China's commercial banks has undergone great changes, and the practice of risk classification is faced with many new situations and new problems. In 2017, the Basel Committee issued the "Guidance on the Prudent Treatment of Assets", which clarified the identification criteria and classification requirements for non-performing assets and restructured assets, aiming to enhance the consistency of the global banking asset risk classification standards and the comparability of results. The China Banking and Insurance Regulatory Commission and the People's Bank of China formulated, issued and implemented the Measures on the basis of learning from good international and domestic standards, combined with the current situation of China's banking industry and regulatory practice, which is of great significance to promote commercial banks to strengthen credit risk management and improve their overall risk management capabilities.

The Measures, which consist of six chapters and 48 articles, require commercial banks to follow the principles of authenticity, timeliness, prudence and independence, and carry out risk classification for all off-balance sheet financial assets that bear credit risks. Compared with the current Guidelines, the Measures expand the scope of assets for risk classification, put forward a new definition of risk classification, emphasize the classification concept centered on the debtor's ability to perform the contract, and further clarify the objective indicators and requirements for risk classification. At the same time, the "Measures" put forward systematic requirements for commercial banks to strengthen risk classification management, and clarified the relevant measures for supervision and management.