China's Banks

China's Banks

In another sign that the authorities aim to clean-up China's Banking Sector and limit systemic risk (and attract foreign capital), the regulator vowed to address issues such as shoddy corporate governance and violation of lending policies to cross-holdings of risky financial products.

The CBRC will inspect the funding source of banks’ shareholders and ensure that they have obtained their stakes in a regular manner, examine banks’ compliance with rules restricting loans to real estate developers, local governments plus industries burdened by overcapacity, and some home buyers, while looking into banks’ interbank activities and wealth management businesses.

Banks are required to submit an initial self-inspection report on their 2017 operations by March 10, and another two reports by June and December detailing their progress.