China’s financial stability guarantee fund to safeguard against systemic risks to be ready by September

China will complete its preparation for establishing a financial stability guarantee fund by the end of September with the central bank leading the work, a document published by State Council showed on Friday.

Government departments including the National Development and Reform Commission, Ministry of Justice, Ministry of Finance and China Banking and Insurance Regulatory Commission will also be involved in preparing to set up the fund, it said.

The China Banking and Insurance Regulatory Commission said in a separate statement on Friday that the financial sector is challenged by increasing “unstable and uncertain” factors both at home and abroad, and that the country has to prepare the resources and policy tools to mitigate against risks.

It said that research us under way and that it has tentatively decided that the fund will be used to offset substantial risks which would endanger the financial market.

Also on Friday, China’s foreign exchange regulator said it will continue to maintain the flexibility of the yuan exchange rate, and actively prevent and defuse risks from external shocks.