Regulator Liu Mingkang on No-Worry Bank Risk

(Beijing) – Despite differences of opinion over China's broad economic outlook for 2011, the market has reached consensus on one key fact about the coming year: Risks loom for the nation's banks.

Commercial banks reported in early December that their combined, new credit outlay would total 7.5 trillion yuan in 2011, flat with the 2010 lending pace yet above expectations.

The Shanghai Stock Exchange Index jumped on news of this hefty credit supply. But bank shares, even after about six years of 30 percent annual revenue growth, have remained depressed, reflecting market concern about future risks.