Creditor panels urge help for firms with financial problems

Creditor committees in China are pushing for reforms and provide support for companies that have good prospects for development but have run into temporary trouble by stepping up financial aid through loans and helping them with deleveraging and debt restructuring.

"Using the committees as information sharing and action coordination platforms, creditor banks were able to fully understand, analyze and make judgments of the risks and operating conditions of relevant companies. Members of the committee reached a consensus on whether or not to continue to support a company and made plans for lending or risk mitigation accordingly," said Tong Meng, deputy director-general of the Sichuan Office of the China Banking and Insurance Regulatory Commission.

"Creditor committees have been running under the mechanisms of information sharing, collective meeting, concerted action, unified credit granting, joint prevention of risk and behavior constraint," he said.