In the bank's "China Financials" bulletin, three central bankers wrote that China should speed up the Financial Stability Law's passage and improve other legal measures to prevent and eliminate financial risks.
If financial authorities want to learn from the Silicon Valley crisis, they should tighten control over financial institutions' timeliness to prevent risks.
China should also allow the deposit insurance system to play its full role and allow the imposition of a mechanism to deal with trouble banks in a smooth and orderly manner in order to effectively fend off systemic risks, according to officials from the Financial Stability Bureau and the central bank's deposit insurance commission.
The article said that Chinese business banks are for the most part in a decent and stable condition.
China should increase its capital reserves for dealing with financial risks, according to officials, to ensure sufficient resources for prompt de-risking.
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