Speaking at the 2005 Fortune Global Forum on May 18, Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), made clear that commercial banks in China have long been considering and making preparation for going public overseas though they still face numerous difficulties.

Liu noted that going public overseas is vital to the reform of commercial banks in China. The banks should meet the requirement of pressure and transparency from market; meanwhile they are also expected to be well prepared and responsible for all investors.

At the symposium of "Recent Situation of Bank Reform in China", Liu said that the commercial banks in China have achieved notable progress in terms of internal administration and control of assets quality over the past years.

"The first change reform has brought along is internal administration. Currently many banks in China have set up their own board of directors, which are now playing the crucial role in bettering the internal administration," added Liu.

The second notable change lies in the change of assets quality control, with Bank of China and China Construction Bank as the examples. While measuring the bad loans, these banks adopted the international general standard and made dramatic achievements though the changes are still premature. In recent years, the rate of capital sufficiency has been widely improved. "By the end of 2006, the rate of capital sufficiency in 80 percent of the commercial banks in China will reach eight percent, a requirement demanded by Basel Accord, so as to solve insolvency," further noted Liu.

Liu held that commercial banks, in the future reforms, should lay more emphasis on learning skills, pay close attention to the threats and challenges, and more important, analyse the challenges. Being the supervisor, CBRC should establish a flexible banking industry. As long as banks have sufficient rate of capital sufficiency and ability to cover the loss resulted from bad loans, CBRC will feel free to control and supervise the banking system regardless of difficulties.

"Currently, we do face some difficulties, but so long as the government implements the forceful macro-control, we have nothing to worry about," said Liu.

By People's Daily Online