China Banking Regulatory Commission (CBRC) has urged the domestic banks to strengthen their risk management practices and adhere to regulatory requirements to minimise problems related to financial risks caused by credit growth this year – reported Xinhuanet.com.
Reportedly, during the first eight months of this year, new loans have surged to CNY8.15 trillion compared to CNY4.91 trillion for the entire last year. Consequently, it has sparked fears of soaring default risks at banks and asset bubbles in the capital market in China.
At a conference in Shanghai while adressing these concerns, Liu Mingkang, chairman of CBRC, said: “With bank loans growing rapidly, all kinds of risks are rising in the banking industry. The ongoing global financial crisis has triggered a worldwide reflection on overhauling the financial supervision system, which includes revising and improving rules on capital adequacy, provision, leverage ratio, liquidity, as well as corporate governance and compensation system,” reported the newspaper.
