People's Bank of China to step up efforts to curb financial risks

Bloomberg reports that Deputy Governor Chen Yulu said that China’s central bank will take measures to prevent systemic financial risks from building in the economy as the recovery takes hold.

Chen said the People’s Bank of China will improve its macro-prudential assessment framework and strengthen supervision of “systemically important” institutions, businesses and infrastructure.

“The priority of the work is to build a systemic financial risk prevention and control system,” Chen said. “We will further require shareholders, various creditors and local governments to implement their responsibilities, and work with financial regulatory authorities to maintain the bottom line of avoiding systemic financial risks.”

In the period covering China’s new five-year plan through 2025, the PBOC will continue opening up the financial sector, which includes freeing up the capital account more and promoting the yuan’s use internationally in a steady and prudent manner, the deputy governor said.

On monetary policy, Chen said the central bank will keep the growth of money supply and aggregate financing in line with the expansion of nominal gross domestic product. It will also seek to improve the money supply mechanism and refrain from flooding the financial system with excess liquidity, he said.