China will steadily reduce the number of high-risk institutions to help prevent systemic financial risksits central bank said.
Reforms of problematic small and medium-sized financial institutions have made key progress and illegal financial activities have been curbed, said the People’s Bank of China (PBOC) in a statement following its annual meeting on financial stability.
The central bank will continue to follow the guidance of “comprehensive planning and coordination, differentiated policies and precise bomb disposal,” it said.
“It is necessary to strengthen the financial risk elimination mechanism and capacity building, strengthen supervision, early warning and evaluation”the PBOC said.
The central bank will improve the legislation and the guarantee fund system for financial stability, as well as the role of deposit insurance, the bank added.
The Chinese economy showed a gradual, if uneven, recovery in the first two months, but Fu Linghui, a spokesman for the Bureau of Statistics, told a briefing on Wednesday that business and personal balance sheets damaged during the pandemic will need time to repair.
Central bank chief Yi Gang told a press conference on March 3 that China has reduced the number of high-risk small and medium-sized financial institutions to more than 300, from more than 600 in the past three years.
The government has unveiled plans to create a new regulator, the National Administration for Financial Regulation, which will take over some of the PBOC’s regulatory responsibilities, such as supervision of financial holdings and investor protection.
Source: Ambito
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