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Measures for relieving regional financial risks and relevant inspirations: A case study of Wenzhou's financial system (No 88, 2015)


By Zhu Hongming & Wu Qing, Research Institute of Finance of DRC

Research Report No 88, 2015 (Total 4773)


Since 2012, the regular financial system in Wenzhou city has witnessed sustained risks which have loomed up along the enterprise guarantee chain with a large scale. The relevant departments have taken a series of measures to deal with these thorny problems. For example, they have established a government-led risk management coordination mechanism to render diversified assistance to address the risks for some venture businesses. In addition, they have made great efforts to write off bad loans and strengthen judicial protection relating to risk management in order to maintain the financial ecological environment. These measures have achieved some effects, yet there still exist some issues. For instance, the loss-sharing mechanism has not been effectively established and the substantive debt restructuring has not yet been started; risk management remains constrained by a number of policies and institutions; the efforts of fighting against escaping the financial obligation are insufficient. Nevertheless, the above-mentioned measures taken by the financial system in Wenzhou are valuable explorations, which could provide worthy inspirations for relieving and preventing regional financial risks.