This is one story where the headline is a lot more exciting than the substance. The guideline in question was issued on Wednesday by the China Banking Regulatory Commission (CBRC). Motivating the regulator is the looming December 11 milestone when foreign banks will have the ability to compete for domestic RMB depositors.

The industry is worried about measuring up to the foreign competition, specifically when it comes to services. Chinese banks would very much like to innovate, but have been reluctant to offer new services because they are unclear which of these the CBRC will approve.

The Vice-Chairman of CBRC was quoted as saying that "Chinese commercial banks lag far behind their international counterparts in terms of financial innovation". So here comes the CBRC with its guidelines, saying that Chinese banks should start doing so.

Do the guidelines offer a comprehensive list of "allowed" activities? no
Do the guidelines contain an abbreviated approval procedure? no
Do the guidelines provide details regarding the future role of CBRC supervision? no

Xinhua gives us the underwhelming summary:

According to the guidelines, the CBRC will set up a sound legal environment to encourage financial innovation. The regulator will further streamline approval procedures and strengthen supervision to facilitate financial innovation.

Will this give the banks the confidence in the regulatory approval process needed to go out there and be creative? Seems unlikely. Maybe future moves by the CBRC will be a little more concrete.