Combating Financial Sector Risk Will Be Painful: PBOC’s 2018 Financial Stability Report

47

The Chinese central bank’s financial stability report for 2018 says that curbing risk in China’s finance sector will be a source of considerable short-term “pain.”

The “China Financial Stability Report 2018” (中国金融稳定报告2018) said that following many years of accumulation the risks as well as cyclical and systemic contradictions in the Chinese economic and financial system are gradually being exposed.

The report released by the People’s Bank of China on 2 November also said that “resolving potential risks and hidden dangers will require the payment of a definite price, and even experiencing considerable pain…the mission remains challenging.”

“Since 2017 a number of risks have been exposed in the financial system,” said Zhou Xuedong, chair of PBOC’s stability department.

“We believe that risk release is pressure release, and this will strengthen the internal stability of the financial system, and set sound foundations for the healthy development of finance over an even longer period.

“Financial risk is not taboo for us, but at the same time we must strictly abide by a spirit of professionalism, and to the greatest extent possible objectively assess China’s financial risk conditions.”

Looking forward to 2019, the report said that considerable uncertainties will continue to prevail in the global economy and financial markets, and during the Chinese economy’s transition from high-speed growth to high-quality growth a number of “grey rhino” financial risks are likely to emerge.

PBOC reaffirmed Cina’s commitment to market reform opening, stating that related policies had not changed and will not change in future.

The new report also publicly revealed for the first time a set of risk ratings of Chinese financial institutions based on assessments conducted by PBOC that concluded in the first quarter of 2018.

Related stories

PBOC Debuts Risk Ratings of Chinese Financial Institutions

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here