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China seeks more disclosure from banks | China seeks more disclosure from banks |
(about 2 hours later) | |
China's major banks have been asked to publish data on 12 key indicators, including off balance sheet assets, to enhance their transparency. | China's major banks have been asked to publish data on 12 key indicators, including off balance sheet assets, to enhance their transparency. |
Banks with total assets of 1.6 trillion yuan ($264bn; £160bn) will need to publish the data within four months of the end of each financial year. | Banks with total assets of 1.6 trillion yuan ($264bn; £160bn) will need to publish the data within four months of the end of each financial year. |
China said the move was in line with rules published by the Basel Committee on international banking regulation. | China said the move was in line with rules published by the Basel Committee on international banking regulation. |
There have been growing concerns over rising bad debts at Chinese lenders. | There have been growing concerns over rising bad debts at Chinese lenders. |
The data that banks will be required to disclose also includes cross-border assets and liabilities, the China Banking Regulatory Commission (CBRC) said. | |
According to data compiled by the Bloomberg news agency, the new requirements will apply to at least 12 of the 19 publicly listed Chinese banks. | According to data compiled by the Bloomberg news agency, the new requirements will apply to at least 12 of the 19 publicly listed Chinese banks. |
Debt concerns | |
Chinese banks - especially the big four state-owned lenders - played a key role in keeping the country's growth momentum going in the years following the global financial crisis. | |
They lent record sums of money in an attempt to sustain China's high growth rate. | |
However, there have been concerns that part of that money has gone towards unproductive investments and that banks may not be able to recover those loans. | |
The fear among many is that a jump in non-performing loans would not only hurt the country's banking sector, but also have a big impact on its overall growth. | |
While the percentage of bad loans at China's banks account for less 1% of total lending, some critics have claimed that banks were either rolling over such loans or even restructuring them to try and keep the reported figure low. | |
That has led to calls for greater scrutiny of the sector. | |
China's state-owned Xinhua news agency quoted the banking regulator as saying that the latest move could help "boost the internal management of the banks and improve transparency". |
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