China’s central bank is calling for the acceleration of the Financial Stability Law legislation by the government of the People’s Republic of China. Three officials from the central bank confirmed this in China Finance; a publication linked to the central bank. According to these officials, such legislation will help to dispose of financial risks threatening the country’s financial sector.
The collapse of Silicon Valley Bank and the banking sector instability that followed has driven China’s central bank to seek measures to ensure that financial authorities closely monitor financial institutions’ date accuracy in order to prevent risks.
While the authors of the article claimed that China’s commercial banks as a whole remain stable and sound, they believe that China’s insurance deposit system needs to utilize its full authority in order to swiftly address and eliminate systematic risks.
In addition, the authors, who are from PBOC’s Financial Stability Bureau and the Deposit Insurance Corp, suggested that the Chinese government consolidates the nation’s capital reserves to ensure that it has the necessary resources at its disposal to combat future risks.