Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data
China to tighten liquidity risk management on smaller banks: regulator
© Reuters. China to tighten liquidity risk management on smaller banks: regulator
BEIJING (Reuters) - China's banking and insurance regulator said on Tuesday it will tighten liquidity management for the country's smaller banks and offer cross-region liquidity support for rural commercial banks if needed.
A run on Yingkou Coastal Bank in the northeastern Liaoning province, China's second bank run in less than two weeks, has revived worries about the health of the country's smaller lenders.
"The banking industry is a very sensitive industry, which requires us to improve the mechanism of liquidity risk management, and fend off systematic financial risks," Liu Rong, vice department chief of city commercial banking at China's Banking and Insurance Regulatory Commission (CBIRC), told a media briefing in Beijing.
He said the Yingkou Bank run was a one-off event triggered by negative rumors and that the bank's operations were back to normal.
Some Chinese banks have accumulated risks due to the economic cycle or poor corporate governance, CBIRC spokesperson Xiao Yuanqi said.
"It is very normal and good to see some banks exiting ... due to the complex environment and fierce market competition," Xiao added.
Asked about a roadmap to resolve problems facing high-risk institutions, Liu said regulators will first encourage them to rescue themselves via capital replenishment and improved corporate governance.
Other approaches include restructuring, mergers and acquisitions, takeovers and bankruptcy, Liu said.
But Zhou Liang, vice chairman of CBIRC, was quoted by financial news outlet Caixin on a Sunday forum as saying the CBIRC would not force mergers among smaller banks.
China has more than 4,500 financial institutions overseen by the banking regulator, most of which are small or midsized.
The rare seizure by government of Baoshang Bank earlier this year and state rescues of Jinzhou Bank and Hengfeng Bank have sharpened concerns about the health of hundreds of small lenders as China's economic growth slows to near 30-year lows.
Commercial banks' non-performing loan ratio was 1.86% by end-September, according to a separate release by the CBIRC on Tuesday, up 0.05% from end-June. The core tier 1 capital ratio, a key metric of the sector's capability to buffer risks, stood at 10.85%, up 0.14% for the same period.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.