China’s lawmakers issue rare warning over banks’ asset quality due to inflated, inaccurate data
- Standing Committee of the National People’s Congress warned some data does not ‘truly reflect the actual situation’ during a meeting last month
- Preventing and resolving financial risks has been elevated as the ‘eternal theme’ of China’s financial work, with the system plagued by property and debt issues
China’s lawmakers issued a rare warning about the asset quality at small and medium-sized financial institutions, as their figures do not “truly reflect the actual situation” and such actions could derail Beijing’s de-risking campaign.
During a meeting of the Standing Committee of the National People’s Congress (NPC) in October, deputies called for more interventions to speed up the disposal of bad loans at small and regional financial institutions.
“The data of some small and medium-sized financial institutions is too inflated and does not truly reflect the actual situation,” according to the minutes of the meeting, which were only released on Wednesday.
“It is recommended that the central financial regulatory authorities promptly identify existing risks, accelerate the disposal of non-performing assets, consolidate capital, improve risk prevention capabilities and enhance its corporate governance structure.”