People’s Republic of China: Financial System Stability Assessment-Press Release and Statement by the Executive Director for People’s Republic of China

IMF Staff Country Reports, December 6, 2017

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Canonical URL: People’s Republic of China: Financial System Stability Assessment-Press Release and Statement by the Executive Director for People’s Republic of China

The paper discusses findings of the Financial System Stability Assessment (FSAP) for China.
Since the 2011 FSAP, China’s impressive economic growth has continued, and it is now undertaking a necessary but prolonged economic and financial transformation.
Tensions have emerged in various areas of the Chinese financial system.

Monetary and fiscal policies aimed at supporting employment and growth have been expansionary in recent years.
Pressures to keep nonviable firms open are strong, particularly at the local government level; these objectives, at times, conflict with financial stability.
The demand for high-yield investment products, coupled with strengthening oversight of the banking sector, has led to regulatory arbitrage and the growth of increasingly complex investment vehicles.

Subjects: Banking, Commercial banks, Credit, Financial institutions, Financial Sector Assessment Program, Financial sector policy and analysis, Financial sector stability, Money, Systemic risk assessment
Keywords: central bank, central bank clearing, Commercial banks, CR, Credit, debt, developments China, Financial Sector Assessment Program, Financial sector stability, financial system, FSAP update, Global, household debt, investment product, ISCR, lending, leverage ratio, liquidity management framework, margin requirement, PBC's facility, People's Bank of China, product, Systemic risk assessment