CBIRC Says It Will “Deleverage Enterprises, Dismantle Shadow Banking”


China’s newly formed banking and insurance regulator has stressed the need to reduce the leverage ratios of the corporate sector, as well as “dismantle” the shadow banking system.

China Banking and Insurance Regulatory Commission (CBIRC) head Guo Shuqing convened the first meeting of its banking and insurance reform leadership team on the morning of 29 March.

The meeting said that the newly formed authority would “steadily drive reductions in enterprise leverage ratios, dismantle shadow banking, firmly strike against illegal financial activities, curb the trend of real estate bubble formation, and cooperate in the rectification of hidden local government debt.”

CBIRC will also “strengthen various forms of risk prevention and dissolution…[and] with a focus on supply-side structural reforms, strengthen contact and coordination with local government and enterprise, advance structural adjustments and mergers and acquisitions, and support market-based rule-of-law-based debt-for-equity swaps.”

The meeting also deliberated on a number of key documents in relation to “strengthening the identification and disposal of bank non-performing assets, and raising the service capability of large and medium-sized banks with respect to financial inclusion operations.”