CBRC is confident debt risks controlled
Source: Xinhua |
August 18, 2011, Thursday
|
Print Edition
Print Edition
CHINA'S banking regulator said local government debt risks are "under control" and efforts to ease them are "going smoothly."
Liu Mingkang, chairman of the China Banking Regulatory Commission, was quoted as saying in an interview published in yesterday's edition of the People's Daily that the CBRC has been closely monitoring China's local financing vehicles and working with local governments to help them manage their debts.
Local government debt totaled 10.72 trillion yuan (US$1.66 trillion) at the end of 2010, the National Audit Office announced in June.
Efforts to overhaul existing local financing vehicle loans and reduce debt risks have been "progressing in an orderly fashion," Liu said.
Banks have been ordered to refrain from providing loans to local governments for unapproved projects and vehicles and to tighten credit management in order to prevent debt increases, he said.
Liu said property loan risk is also controllable, as banks have enhanced their credit risk control, especially for speculative developers.
Liu also urged banks to step up their prevention of risk associated with shadow banking, which has expanded amid tightening liquidity this year. Shadow banks are non-banking financial institutions that function like commercial banks. These institutions include insurers, mutual funds and private-equity funds.
The CBRC will strictly study all financing products pushed by commercial banks to ensure that risk from these products will not go into the banking system, Liu said.
Liu Mingkang, chairman of the China Banking Regulatory Commission, was quoted as saying in an interview published in yesterday's edition of the People's Daily that the CBRC has been closely monitoring China's local financing vehicles and working with local governments to help them manage their debts.
Local government debt totaled 10.72 trillion yuan (US$1.66 trillion) at the end of 2010, the National Audit Office announced in June.
Efforts to overhaul existing local financing vehicle loans and reduce debt risks have been "progressing in an orderly fashion," Liu said.
Banks have been ordered to refrain from providing loans to local governments for unapproved projects and vehicles and to tighten credit management in order to prevent debt increases, he said.
Liu said property loan risk is also controllable, as banks have enhanced their credit risk control, especially for speculative developers.
Liu also urged banks to step up their prevention of risk associated with shadow banking, which has expanded amid tightening liquidity this year. Shadow banks are non-banking financial institutions that function like commercial banks. These institutions include insurers, mutual funds and private-equity funds.
The CBRC will strictly study all financing products pushed by commercial banks to ensure that risk from these products will not go into the banking system, Liu said.
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