Investment risk warned
(Xinhua)
Updated: 2006-07-16 09:09
Chinese banks and other financial institutions should pay special attention
to investment risks in power, coal, steel, real estate, auto and transportation
industries.
Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC),
made the remark at a conference on Chinese financial situation in the first half
of this year.
The overcapacity problem and adjustment of industrial structure in these
industries may increase credit risks of banks, he told leaders of major banks
and other financial institutions attending the meeting.
As China continues its reform on financial systems, banks are facing more
market risks that may be brought by fluctuation of exchange rate, innovation of
financial products and gradual marketization of interest rate, he said.
Banks should pay intensive attention to possible risks concerning loans to
enterprises with high-level energy consumption and pollution, because these
enterprises may face operational difficulties under circumstances of fuel price
hike and governmental macro-control policy, he said.
Liu asked all banking institutions to strict their credit standards so as to
rein in loans. Figures show China's RMB loans outstanding totaled 21.53 trillion
yuan (2.7 trillion U.S. dollars) at the end of June, up 15.24 percent from June
last year.
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