One in 10 of China’s Banks Flunks PBOC’s First Risk-Rating Test
(Bloomberg) — About one in 10 of China’s 4,000 banks received a fail rating in the central bank’s first review of the industry’s risks, highlighting challenges facing the nation’s $45 trillion financial system.
Four hundred and twenty firms, all rural financial institutions, were deemed extremely risky after scoring eight or higher out of 10, according to the 2018 China Financial Stability Report published by the People’s Bank of China (PBOC), the nation's central bank. Just two banks received the top rating in the review, the first time the central bank has assigned ratings. None of the institutions were named.
Businesses rated 8 or higher will face sanctions designed to limit them from doing new business, re-lending or receiving support from authorities, the PBOC said late last week.
China’s government has made controlling financial risk a priority as President Xi Jinping tries to prevent a record buildup of corporate debt from tipping the economy into a crisis. Even as authorities have appeared to ease up on the campaign in recent months to boost short-term growth, financial regulators haven’t toned down their determination to root out industry malpractices.
The PBOC’s reviews, conducted in the first three months of the year, will determine how they police particular banks. Firms will be subject to different policies, such as fees on deposit-insurance mechanisms, reserve ratio requirements and limits on asset growth, based on their scores.
Contact reporter Yang Ge (email@example.com)
May 29 18:23
May 29 18:04
May 29 12:40
May 28 16:02
May 28 12:52
May 28 09:10
May 27 16:43
May 27 13:27
May 27 12:54
May 26 17:38
May 26 17:03
May 26 12:26
May 26 10:44
May 26 03:26
- 1China’s ‘Bat Woman’ Warns Coronavirus Is ‘Just Tip of the Iceberg’
- 2Update: Mass Testing in Wuhan Uncovers Over 200 Asymptomatic Covid-19 Cases
- 3In Depth: Huawei’s Chip Dreams in Crosshairs of Latest U.S. Assault
- 4Premier Sends ‘Powerful’ Signal for China to Join Asia-Pacific’s Largest Trade Pact
- 5Washington Pressures China to Let U.S. Airlines Come Back
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas