Nation vows steps to keep volatility of high-risk financial institutions at bay
China will adopt various measures including mergers, acquisitions and restructuring to lower the risks of some high-risk financial institutions and even allow some of them to experiment with bankruptcy, said a senior official of the country's banking and insurance regulator.
"We will mainly consider mergers and acquisitions as an option to deal with high-risk financial institutions to reduce the volatility triggered by market exit. At the same time, we will handle financial risks based on principles of market orientation and the rule of law," said Xiao Yuanqi, chief risk officer and spokesman of the China Banking and Insurance Regulatory Commission, at a recent media briefing.
Wang Jingwu, head of the financial stability bureau at the People's Bank of China, the central bank, told the Beijing-based newspaper Financial News that the PBC will actively explore the establishment of a market-oriented exit mechanism for financial institutions based on the rule of law, using the deposit insurance scheme as a platform.