China to reshuffle management, recapitalize smaller banks to curb risks: Caixin
Reuters
Published Nov 10, 2019 05:13AM ET
China to reshuffle management, recapitalize smaller banks to curb risks: Caixin
BEIJING (Reuters) - China will take steps including management reshuffles and fund infusions to bolster the weakening profiles of its smaller banks, vice chairman of the banking and insurance regulator said, according to financial news outlet Caixin on Sunday.
As financial stability remains the top priority, the regulator will use reform and restructuring as the key approach to resolving banking risks, instead of doing "surgeries," said Zhou Liang, vice chairman of China's Banking and Insurance Regulatory Commission (CBIRC), at a forum in Beijing on Sunday, Caixin reported.
The health of China's smaller banks has come under renewed scrutiny recently, as two local lenders suffered bank runs in less than two weeks amid fears over poor management and liquidity issues.
"Smaller banks are small financial institutions by size, but they carry a great spill-over risk," said Zhou.
The smaller sector is facing risks because of a difficult macro environment both at home and abroad, poor management at smaller banks, and credit risks triggered by deteriorating financial conditions of companies, Zhou said.
Zhou said some of the reform steps would include improving corporate governance, writing off non-performing assets and replenishing capital.
"For institutions that have relatively severe problems, they need to introduce new strategic investors to carry out structural reforms," Zhou said.
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 underlying health of hundreds of small lenders in the country as China's economic growth slowed to near three decade lows.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.