People's Republic of China: Financial System Stability Assessment

IMF Staff Country Reports, November 14, 2011

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Report discusses the IMF/World Bank Financial Sector Assessment Program (FSAP) exercise for China undertaken during June–December 2010.
Assessment concluded that reforms in China have progressed well in moving toward a more commercially oriented financial system.
Despite success and rapid growth, China’s financial sector is confronting several near-term risks, structural challenges, and policy-induced distortions.
A properly composed and timely implemented set of reforms would help address these challenges.
A framework to resolve weak financial institutions on a timely basis is also needed.

Reforms have progressed well toward a more commercially oriented financial system.
Near-term risks are present despite rapid growth.
Structural challenges persist in the financial sector.
Policy-induced distortions are affecting financial sector functioning.
Weak financial institutions require a resolution framework to enable timely intervention.

Implement a properly composed set of reforms in a timely manner to address near-term risks, structural challenges, and policy-induced distortions.
Establish a framework to resolve weak financial institutions on a timely basis.

Subject: Banking, Commercial banks, Credit, Financial institutions, Financial sector policy and analysis, Loans, Money, Prices, Real estate prices, Stress testing
Keywords: asset quality, banking sector, banking system, bond market, central bank, Commercial banks, CR, Credit, credit risk, exchange rate, financial system, fixed income, Global, interest rate, investment funds, ISCR, Loans, monetary policy, Real estate prices, return on assets, Stress testing

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