China's bank regulator issues reform guidelines
By Zhang Lu (China Daily)Updated: 2006-12-07 08:51
The guidelines will take effect next Monday, the day China will fully open its banking sector to foreign lenders in line with its commitment to the World Trade Organization.
According to Tang Shuangning, vice-chairman of the China Banking Regulatory Commission (CBRC), China's banking industry urgently needs to speed up its financial reform to deal with rising competition after fully opening.
"Chinese commercial banks lag far behind their international counterparts in terms of financial innovation," Tang said.
He said non-interest income generally accounts for more than 50 per cent of the total income of big international banks. But the highest rate for Chinese commercial banks from fees is less than 30 per cent and most of banks earn less than 10 per cent.
He said the guidelines are the first such document concerning financial innovation issued by the banking regulator, signalling a new stage of reform.
According to the guidelines, the CBRC will set up a sound legal environment to encourage financial innovation. The regulator will further streamline approval procedures and strengthen supervision to facilitate financial innovation.
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