China sends 500 senior bankers for training on risk controls as bad loans at decade-high worry regulators
- Chinese banks have seen their profits eroded by the Covid-19 crisis, resulting in a surge in non-performing loans to 10-year high
- CBIRC has warned of weakening asset quality, saying a slight relaxation of rules could encourage malpractices
About 500 senior officials from the mainland’s Big Four lenders, policy banks to rural co-operatives will take lessons on how to detect and assess risks, and adopt new digital technologies to improve efficiency, a top official said.
“The training aims to bring risk management in the financial industry to fruition,” said Zhao Changyi, a leading financial risk management expert who also heads the initiative sponsored by the China Banking and Insurance Regulatory Commission (CBIRC). “Financial stability will lay a solid foundation for a healthy economic order.”
The authorities are concerned the pandemic that has crushed many businesses in the economy would push businesses into the shadow banking world, or peer-to-peer (P2P) lenders for quick but often expensive loans to ease their credit crunch.