{ "title": "IMF Executive Board Concludes 2024 Financial System Stability Assessment with the People’s Republic of China", "publication": "IMF News, April 4, 2025", "sourceUrl": "https://www.imf.org/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment", "canonical": "https://www.imf.org/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment", "overlayPath": "/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment/index.md", "summary": "The Executive Board of the International Monetary Fund (IMF) concluded the 2024 Financial System Stability Assessment (FSSA) with The People’s Republic of China.", "publishDate": "2025-04-04", "sections": [ { "heading": "Key facts and metadata", "content": "- Press Release No. 25/090\n- Date: April 4, 2025\n- Press officer: Ting Yan\n- Phone: +1 202 623-7100\n- Contact email: MEDIA@IMF.org" }, { "heading": "Major findings of the 2024 FSSA", "content": "- Since the last FSAP in 2017, the authorities have made notable progress in:\n - strengthening financial supervision and regulation;\n - continuously implementing international regulatory standards;\n - enhancing systemic risk monitoring.\n- Regulatory reforms led to important reductions in risks arising from non-bank financial institutions.\n- Bank capital and liquidity levels appear adequate overall, but financial stability risks are elevated.\n- Stress tests indicate the banking system would remain resilient in an adverse scenario." }, { "heading": "Elevated vulnerabilities and sources of risk", "content": "- Property sector downturn: rising vulnerabilities stemming from ongoing property sector adjustment.\n- Local government financial vehicles (LGFV): widening strains in highly leveraged LGFVs warrant attention; a more comprehensive solution to address the LGFV debt overhang is needed.\n- Economic slowdown channels: declining economic growth could affect credit portfolio quality.\n- Profitability pressures: accommodative monetary policy is weakening banks’ organic profitability, with smaller banks—particularly those with riskier business models—being more vulnerable.\n- Data and analytics gaps: need to strengthen data quality, granularity, collection, and accessibility to enhance systemic risk assessment." }, { "heading": "Policy recommendations and priority reforms", "content": "- Strengthen the financial stability framework:\n - Further strengthen the draft Financial Stability Law.\n - Designate an independent and properly resourced lead resolution authority.\n - Build greater crisis management capabilities.\n - Introduce an effective emergency liquidity assistance framework.\n- Enhance regulation and supervision:\n - Continue implementing FSSA recommendations to strengthen risk-based supervision, financial regulation, and systemic risk monitoring.\n - Boost supervisory resources and independence.\n - Cultivate specialist skills and enhance inter-agency cooperation.\n - Apply additional scrutiny to mid-size and smaller banks and some bank business models.\n- Address LGFV and property sector stress:\n - Pursue a more comprehensive solution to the LGFV debt overhang.\n - Continue implementing measures to contain impacts from the property downturn and LGFV financial stress; many such measures were introduced after the FSAP took place.\n- Enhance analytical capacity:\n - Allocate additional resources and further strengthen analytical capacity to ensure regulatory frameworks remain commensurate with the scale and complexity of the financial system.\n- Climate and inclusion:\n - Continue bolstering capacity to analyze climate risks; authorities commended for being at the forefront of green finance.\n - Continue advances on financial inclusion." }, { "heading": "Executive Board assessment", "content": "- Executive Directors broadly agreed with the analysis and recommendations of the FSSA for China.\n- Directors commended significant progress since the 2017 FSAP, including stronger financial sector oversight, operationalization of the macroprudential framework, and rein in of risks in the nonbank financial intermediary sector.\n- Directors were broadly reassured by stress test findings but emphasized:\n - need for improved data quality and accessibility;\n - close monitoring of mid-size and smaller banks;\n - continued attention to risks from the property sector adjustment and LGFVs.\n- Directors encouraged continued efforts to strengthen crisis management and resolution frameworks in line with international best practices." }, { "heading": "Context on FSAP and FSSA", "content": "- The Financial Sector Assessment Program (FSAP), established in 1999, is a comprehensive and in-depth assessment of a country’s financial sector.\n- FSAPs provide input for Article IV consultations and enhance Fund surveillance.\n- FSAPs are mandatory for the 47 jurisdictions with systemically important financial sectors and otherwise conducted upon request from member economies.\n- The key findings of an FSAP are summarized in a Financial System Stability Assessment (FSSA).\n- Note on Board summing up: At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors; an explanation of qualifiers used in summings up is provided at the IMF external link referenced in the source.\n\nSource: IMF Executive Board Concludes 2024 Financial System Stability Assessment with the People’s Republic of China (Press Release No. 25/090, April 4, 2025).\n\n---\n\n\n References\n\n- People's Republic of China and the IMF\n- Financial Sector Assessment Program (FSAP)\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment" } ], "bullets": [ "[Markdown version](/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment/index.md)", "[Structured JSON version](/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment/index.json)", "[Bundle manifest](/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment/bundle-manifest.json)", "Published: April 4, 2025", "Press Release No. 25/090", "Date: April 4, 2025", "Press officer: Ting Yan", "Phone: +1 202 623-7100", "Contact email: MEDIA@IMF.org", "Since the last FSAP in 2017, the authorities have made notable progress in:", "Regulatory reforms led to important reductions in risks arising from non-bank financial institutions.", "Bank capital and liquidity levels appear adequate overall, but financial stability risks are elevated.", "Stress tests indicate the banking system would remain resilient in an adverse scenario.", "Property sector downturn: rising vulnerabilities stemming from ongoing property sector adjustment.", "Local government financial vehicles (LGFV): widening strains in highly leveraged LGFVs warrant attention; a more comprehensive solution to address the LGFV debt overhang is needed.", "Economic slowdown channels: declining economic growth could affect credit portfolio quality.", "Profitability pressures: accommodative monetary policy is weakening banks’ organic profitability, with smaller banks—particularly those with riskier business models—being more vulnerable.", "Data and analytics gaps: need to strengthen data quality, granularity, collection, and accessibility to enhance systemic risk assessment.", "Strengthen the financial stability framework:", "Enhance regulation and supervision:", "Address LGFV and property sector stress:", "Enhance analytical capacity:", "Climate and inclusion:", "Executive Directors broadly agreed with the analysis and recommendations of the FSSA for China.", "Directors commended significant progress since the 2017 FSAP, including stronger financial sector oversight, operationalization of the macroprudential framework, and rein in of risks in the nonbank financial intermediary sector.", "Directors were broadly reassured by stress test findings but emphasized:", "Directors encouraged continued efforts to strengthen crisis management and resolution frameworks in line with international best practices.", "The Financial Sector Assessment Program (FSAP), established in 1999, is a comprehensive and in-depth assessment of a country’s financial sector.", "FSAPs provide input for Article IV consultations and enhance Fund surveillance.", "FSAPs are mandatory for the 47 jurisdictions with systemically important financial sectors and otherwise conducted upon request from member economies.", "The key findings of an FSAP are summarized in a Financial System Stability Assessment (FSSA).", "Note on Board summing up: At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors; an explanation of qualifiers used in summings up is provided at the IMF external link referenced in the source.", "[People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)", "[Financial Sector Assessment Program (FSAP)](https://www.imf.org/external/np/fsap/fsap.asp)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment/index.md", "json": "/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment/index.json", "bundleManifest": "/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T03:44:23.459Z" }