(Yicai Global) Jan. 31 -- China has asked the European Union to reconsider proposed supervision rules requiring non-EU financial institutions with assets of at least EUR30 billion (USD37 billion) to set up parent holding companies, China's central bank said.

The People's Bank of China and China Banking Regulatory Commission wrote a letter in response to the European Commission's call for holding structures called intermediate parent undertakings. China reminded EU authorities that their Chinese counterparts have not yet set up IPU requirements in this respect. China hopes the EU will reconsider the EUR30 billion threshold, the letter said.

The EC proposed in November 2016 that certain non-EU financial institutions should consolidate their EU activities under IPUs, mirroring similar regulatory moves in the U.S. Too low a cutoff point may prompt other regulators to introduce similar requirements, thereby reducing the ability of banks to finance the real economy and trade, the joint letter said.

The U.S. requires foreign-funded financial institutions with USD50 billion or more of non-branch assets in the country to set up an intermediate holding company, the letter said. The letter also encouraged European authorities not to include the total assets of branches at non-EU financial institutions in their calculations with respect to IPU establishment and not to include subsidiary banks in the IPU framework.

"China has signed multiple memorandum of understanding on cooperation with many EU countries and held joint meetings to strengthen supervision cooperation with these countries and to ensured sound and stable run of branches of Chinese banks within EU jurisdiction," it said.

China hopes that these concerns can be fully considered and looks forward to continuing the dialog on this issue with relevant parties, the letter said.