Caixin Explains: Why China’s Creating a Financial Security Fund

In the government work report delivered on Saturday, Chinese Premier Li Keqiang announced plans to set up a financial security fund, a device that several developed economies have adopted to deal with troubled systemically important financial institutions.

“A fund for ensuring financial stability will be established, and market- and law-based ways will be used to defuse risks and potential dangers,” Li said in the annual report. “All these efforts will ensure that no systemic risks arise.”