Banks move into insurance business
By Li Yanping and Luo Jun (China Daily)Updated: 2006-12-27 09:14
The People's Bank of China said it is evaluating draft regulations to establish an insurance plan to protect depositors from bankrupt financial institutions. Bad loans among China's banks totalled 7.3 per cent of the country's total lending at the end of September.
"We are accelerating the pace of studying the law and we hope to make some progress next year," People's Bank of China Vice-Governor Wu Xiaoling told yesterday's conference.
The Chinese central bank, through the State Administration of Foreign Exchange, is also the manager of the world's biggest holdings of foreign reserves, which surpassed US$1 trillion at the beginning of November. China holds several types of overseas currencies among the reserves, including the Japanese yen, Wu said.
The government may set up a new agency to manage the reserves, modelling it on the Singaporean Government's Temasek Holdings Pte, according to Li Rongrong, chairman of the State-owned Assets Supervision and Administration Commission.
Temasek, 100 per cent owned by Singapore's Ministry of Finance, had an estimated S$90 billion (US$55 billion) in assets as of last year, controlling companies that accounted for 44 per cent of the Straits Times Index.
Companies that Temasek owns stakes in include 57 per cent of Singapore Airlines Ltd, the world's second-biggest carrier by value. Temasek owns 28 per cent of DBS Group Holdings Ltd, Southeast Asia's largest bank. The state-owned investment agency even owns hotels such as the Raffles Hotel and the Singapore zoo.
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