In line with the requirements of the Basel Committee on Banking Supervision, the banking sector has built up an asset-liability constraint mechanism with capital adequacy ratio at its core, as well as a market-based loss absorbency and risk prevention and control mechanism.
At the beginning of the reform and opening-up, bank employees got the same compensation regardless of their performance, whereas a market-based performance evaluation system and a salary system that linked employees’ remunerations with their contributions were established after the reform. The deepened reform and opening-up has further improved the accounting standard and information disclosure policy, and enhanced external supervision and market discipline.