China News Service, March 27. According to the central bank's website, Pan Gongsheng, Governor of the People's Bank of China, delivered a keynote speech at the "Deepening Asian Financial Cooperation" forum at the Boao Forum for Asia 2024 Annual Conference. He emphasized that China has always attached great importance to proactively preventing and defusing financial risks, and the construction of the domestic financial safety net has always adhered to the principle of "preventing excessive accumulation of financial risks beforehand, and handling risks quickly and efficiently during and after the event."
The first is to strengthen corporate governance and risk management of financial institutions. Stable financial institutions are the solid foundation of the financial safety net. At the beginning of this century, China took the initiative to reform and reorganize several large state-owned banks and achieved success. Several large banks have become the mainstay of China's financial system, strongly supporting the sustained and rapid growth of the Chinese economy.
The second is to strengthen financial supervision. Financial supervision is the “first line of defense” of the financial safety net. China optimizes and adjusts the financial regulatory system in a timely manner based on changes in the financial market and financial system, and promotes macro-prudential management, micro-prudential supervision, and behavioral supervision to perform their respective duties, cooperate with each other, and form synergy.
The third is to strengthen the protection of disposal resources. China currently has deposit insurance funds, insurance protection funds, securities investor protection funds, trust industry protection funds, and financial stability protection funds, all of which have accumulated to a certain extent. China established the deposit insurance system in 2015. The current reimbursement limit of 500,000 yuan can provide full protection for more than 99% of depositors. It implements a risk differential rate mechanism, rewards the good and punishes the bad, promotes prudent operation of institutions, and is endowed with financial Risk early corrective function.
The fourth is to give full play to the role of lender of last resort. The People's Bank of China has played an important and active role in the reform and reorganization of large banks, financial risk resolution, and systemic financial risk prevention and control, effectively safeguarding China's financial stability.
The fifth is to strengthen the legal guarantee of financial stability. China is formulating a "Financial Stability Law" and is striving to build a risk-handling responsibility mechanism with equal rights and responsibilities, compatible incentives and constraints, and a scientific and reasonable risk-handling cost-sharing mechanism.
Pan Gongsheng said that the construction of the Asian financial safety net requires the unity, cooperation and active construction of all parties. The People's Bank of China is willing to fully communicate with all parties to jointly build a more effective financial safety net.