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China to step up banking oversight in 'arduous' fight on financial risks

Reuters  |  BEIJING 

(Reuters) - will step up oversight in the sector this year to reduce financial risks, the country's said, stressing that long-term efforts would be needed to control sector chaos.

The Regulatory Commission (CBRC) said late on Saturday in a statement that its priorities included increasing supervision over shadow and interbank activities.

"shareholder management, corporate governance and risk control mechanisms are still relatively weak, and root causes creating market chaos have not fundamentally changed," the CBRC said.

"Bringing the sector under control will be long-term, arduous, and complex," it said.

The said violations in corporate governance, property loans, and disposal of non-performing assets will be punished more strictly, and that it would strengthen risk control in interbank activities, and off-balance sheet business.

has repeatedly vowed to clean up disorder in its system.

In recent months, regulators have introduced a series of new measures aimed at controlling risk and leverage in the financial system, with everything from lending practices to shadow under the microscope. [nL3N1JL02S] [nL4N1P104N]

Already in January, the CBRC has published regulations that put limits on the number of commercial that single investors can have major holdings in.

has declared that financial security is vital to national security.

The government is particularly concerned about the massive shadow industry, lending conducted outside of the regulated formal system.

It fears that a big default or series of loan losses could cascade through the world's second-biggest economy, leading to a sudden halt in lending. [nL8N1OS108]

(Reporting by Michael Martina; Editing by Simon Cameron-Moore)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, January 14 2018. 09:30 IST
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