The transition of the economic system, the change of the social environment, the rigidity of the financial system, the inadequacy of financial supervision and the defects in the legal framework for the financial sector are among the causes of the high risks in China’s financial system. Scholars and government officials have done numerous studies in those regards.
If state aid is approved by the European Commission, it essentially requires only shareholders and subordinated creditors to be bailed in. These requirements are below the minimum bail-in of 8% of the institution’s total liabilities and own funds before public funds can be used in resolution (Deutsche Bundesbank 2017).