China has reportedly shut down nearly 25% of its banks as it tightens oversight on smaller financial institutions.
According to the Financial Times, the country closed over 670 banks in 2025, marking a historic high. This data comes from China’s National Financial Regulatory Administration and was published on October 3.
Most of the bank closures occurred in rural regions, reducing the total number of banking entities in China to 3,139—an overall decline of 23% over the past four years. The Financial Times noted that low interest rates and ongoing deflation have put considerable pressure on bank profits, which coincides with a persistent slowdown in the property sector.
Jason Bedford, a senior visiting research fellow at the East Asian Institute, National University of Singapore, mentioned that this wave of banking consolidation is aimed at simplifying regulations and reducing the risk of liquidity crises in smaller banks.
“We’ve never experienced consolidations on this scale before,” he commented.
Furthermore, a report from Fitch highlighted that small banks in China, particularly those in rural and smaller cities, are considered the weakest link in the banking system due to their poor asset quality and inadequate capitalization. It pointed out that these rural institutions account for the majority of recent bank closures, though banks in regional cities are also facing heightened scrutiny.
In other banking developments, a recent report showcased a trend among Wall Street banks to boost their hiring of artificial intelligence talent. This shift moves beyond just hiring model builders to include engineers who can create AI agents used in various areas like trading, compliance, and back-office functions.
AI job postings at banks like JPMorgan Chase, Citigroup, and Capital One surged by 49% this year, amounting to 139,819 listings, based on data compiled by Draup, an enterprise hiring analytics firm.
The report noted that this hiring spree is a response to a regulatory gap. New guidelines from the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, issued in April 2023, have updated the framework that previously governed model risks since 2011, thereby excluding generative and agentic AI technologies.
The agencies recognized these new technologies as “novel and rapidly evolving,” allowing banks to apply their own risk management practices and governance standards.
