China: In a fresh commitment to address a rural bank crisis that has sparked protests ahead of the 20th Party Congress and raised concerns about financial stability, China's banking regulator on Thursday cracked down on criminal activity among small lenders. Tightened it Promised to tighten.
According to the China Banking and Insurance Regulatory Commission (CBIRC), China, the world's second-largest economy, accounts for about a third of the world's small and medium-sized banks, but they have acquired significant exposure over time.
According to the CBIRC, Qi Jiang enforces regulatory restrictions on equity and related transactions, with a focus on defrauding shareholders and executives of smaller banks. In order to enhance the quantity and quality of their capital, the regulator is also urging small banks to take capital from abroad as well.
Qi claimed that small and medium-sized banks in China generally run smoothly, but that the regulator will continue "risk settlement" to protect public savings.
Since mid-April, four rural banks in Henan province and one in neighboring Anhui have made deposits, prompting complaints from angry customers. According to estimates, the frozen assets are worth 40 billion yuan ($5.9 billion), and some depositors worry that they may have lost their entire life savings.
Authorities have accused a private financial group of defrauding the public by promoting wealth management products with high returns. Late last week, local regulators in both provinces began paying customers deposits of up to 50,000 yuan; Henan said it was largely completed on Thursday.
The two provinces announced earlier in the day that they would start paying people who have deposited up to 100,000 yuan from Monday.
According to Qi, due to the multiple parties involved, the heavy workload, and the need for cross-checking with background data, Henan and Anhui were entering customer information through recently built systems.
According to Liu Zhongrui, representative of the banking regulator's Department of Statistics and Risk Monitoring, financial risks were visible as a result of China's economic slowdown.
"The economic pressure in the financial sector has gradually manifested due to the complex situation at home and abroad," he claimed. "Some recent issues have been merged with the earlier ones. He continued, noting that off-balance sheet lending, even "high-risk shadow banking", could make a comeback under the banner of so-called 'innovation'.
Due to disruptions brought on by Beijing's zero-Covid policy, China's GDP did not live up to expectations in the second quarter, growing only 0.4% from a year ago.
Ahead of the party congress later this year, where President Xi Jinping is expected to be sworn in for a historic third term, the central government has taken steps to ensure stability, issuing warnings about a resurgence of financial and economic risks. . , Because the economy is slow.
In an online article on Tuesday, the Henan branch of the finance ministry said it would focus on risk prevention, corporate bond defaults, threats to small and medium-sized banks, as well as securing jobs in the real estate and energy sectors. It promised to enhance risk management and prevent financial issues from escalating to other areas.
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