China says must balance stabilizing growth and financial risk prevention
Reuters
Published Nov 28, 2019 07:39AM ET
China says must balance stabilizing growth and financial risk prevention
BEIJING (Reuters) - China must balance the relationship between stabilizing growth and financial risk prevention, the State Council's financial stability committee concluded in a meeting chaired by Vice Premier Liu He on Thursday.
The government will increase "counter-cyclical" adjustments - suggesting more economic support measures to come - while resolving financial risks through more reforms, according to a statement summarizing the meeting posted on the Chinese government website.
"In the next stage (of financial risk prevention), it is necessary to be problem-oriented, further deepening the reform of capital markets and small and medium banks, and guide the healthy development of the private equity industry," the statement said.
It added China would strengthen capital capabilities for commercial banks, especially small to medium-sized lenders.
Earlier this year, a rare government seizure of then little-known Baoshang Bank and a state-rescue of Jinzhou Bank and Hengfeng Bank revived concerns about the true health of hundreds of small lenders in the country as China's economic growth slowed to nearly a 30-year low.
In November, the government of a Chinese city sought to assure depositors of a local bank's financial health in the wake of the country's second bank run in two weeks, triggered by fears over ill management and liquidity issues at smaller lenders.
"(We must) maintain the stable operation of the financial system, and maintain the stability of the overall economic and social environment," the statement said.
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Written By: Reuters
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