## IMF Executive Board Concludes 2024 Financial System Stability Assessment with the People’s Republic of China _IMF News, April 4, 2025_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2024 Financial System Stability Assessment with the People’s Republic of China](https://www.imf.org/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment) ## Other formats - [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) ## Bibliographic details - Published: April 4, 2025 --- ### Key facts and metadata - Press Release No. 25/090 - Date: April 4, 2025 - Press officer: Ting Yan - Phone: +1 202 623-7100 - Contact email: MEDIA@IMF.org ### Major findings of the 2024 FSSA - Since the last FSAP in 2017, the authorities have made notable progress in: - strengthening financial supervision and regulation; - continuously implementing international regulatory standards; - enhancing systemic risk monitoring. - 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. ### Elevated vulnerabilities and sources of risk - 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. ### Policy recommendations and priority reforms - Strengthen the financial stability framework: - Further strengthen the draft Financial Stability Law. - Designate an independent and properly resourced lead resolution authority. - Build greater crisis management capabilities. - Introduce an effective emergency liquidity assistance framework. - Enhance regulation and supervision: - Continue implementing FSSA recommendations to strengthen risk-based supervision, financial regulation, and systemic risk monitoring. - Boost supervisory resources and independence. - Cultivate specialist skills and enhance inter-agency cooperation. - Apply additional scrutiny to mid-size and smaller banks and some bank business models. - Address LGFV and property sector stress: - Pursue a more comprehensive solution to the LGFV debt overhang. - Continue implementing measures to contain impacts from the property downturn and LGFV financial stress; many such measures were introduced after the FSAP took place. - Enhance analytical capacity: - Allocate additional resources and further strengthen analytical capacity to ensure regulatory frameworks remain commensurate with the scale and complexity of the financial system. - Climate and inclusion: - Continue bolstering capacity to analyze climate risks; authorities commended for being at the forefront of green finance. - Continue advances on financial inclusion. ### Executive Board assessment - 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: - need for improved data quality and accessibility; - close monitoring of mid-size and smaller banks; - continued attention to risks from the property sector adjustment and LGFVs. - Directors encouraged continued efforts to strengthen crisis management and resolution frameworks in line with international best practices. ### Context on FSAP and FSSA - 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. *Source: IMF Executive Board Concludes 2024 Financial System Stability Assessment with the People’s Republic of China (Press Release No. 25/090, April 4, 2025).* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2025/04/04/pr25090-china-imf-executive-board-concludes-2024-financial-system-stability-assessment_