Liu Mingkang, chairman of China Banking Regulatory Commission (CBRC), said during his recent inspection tour in Hunan province that the potential risks existing in the banking industry should by no means be underestimated under the relatively good economic and financial situation, and work on preventing and resolving financial risks should not be relaxed. Experience in the past that financial risks increases after each macro-control should be seriously studied. In the light of new characteristics and developments of financial risks under the new situation corresponding measures should be studied so as to take preventive measures and nip possible troubles in the bud and continue to raise the level of anticipation, initiative and efficiency of banking risk management.

Liu Mingkang stressed that under current situation three aspects of risk supervision and control work should take priority. One is to improve risk-warning work. Improve monitoring of risks in financial institutions of the banking industry, make early warning and accurate judgment; on the basis of distinguishing between liquidity risks and liquidation risks take effective measures to dispose of the risks in cooperation with relevant departments.

Second is to intensify work on risk disclosure and ongoing supervision. Help financial institutions of the banking industry to effectively distinguish risks, avoid risks and handle risks through further intensifying and improving work on risk disclosure in the daily supervision; urge them to improve work on accurately classifying assets, making adequate provision and verifying and canceling bad and doubtful debts; raise capabilities in independent prevention and solving financial risks.

Third is to establish as quickly as possible a market exit mechanism for financial institutions of the banking industry; accelerate risk handling process of the financial institutions and form in a fundamental sense a survival-of-the-fittest market competition environment.

By People's Daily Online