Banking

China calls on banks to reduce loan risk

(Agencies)
Updated: 2009-09-19 22:49

BEIJING: China's bank regulator has called on banks to improve their internal risk management following a surge of new loans in the first eight months of this year, a notice on the agency's Web site said.

"With bank loans growing rapidly, all kinds of risks are rising in the banking industry," Liu Mingkang, chairman of the China Banking Regulatory Commission, said at a Shanghai conference Friday, according to the commission's Web site.

Beijing's 4 trillion yuan ($586 billion) stimulus plan to protect the economy from the global recession has resulted in heavy spending on public works and helped boost investment in factory equipment and construction. But it has also brought risks of asset bubbles and defaults.

Bank lending in China soared to a record 7.1 trillion yuan ($1.1 trillion) in the first half of this year. It reached 8.15 trillion yuan ($1.2 trillion) by the end of August, the People's Bank of China reported, higher than the 4.91 trillion yuan in lending for all of last year.

China's Communist Party Central Committee said Friday at the end of its annual four-day meeting that the country would continue its proactive fiscal policy and moderately relaxed monetary policy, but more emphasis would be placed on structural adjustments, innovation, energy efficiency and environmental protection.