China must move on to accelerate legislation when it comes to the Financial Stability Law and also enhance other legal arrangements that are designed to safeguard as well as dispose-off the financial risks, wrote three officials from the People’s Bank of China in China Finance, one of the publications affiliated with the Central Bank.
The article in the publication said that the financial authorities in China should make the supervision of financial institutions more robust by improving the data accuracy so as to prevent the risk, if any sort of enlightenment should be drawn from what happened in the case of Silicon Valley Bank in the US.
Apparently, China should also make sure that the insurance deposit system plays its role in its entirety, thereby allowing the mechanism to take care of the problematic banks in a more swift and orderly manner in order to effectively safeguard against systematic risks, confirmed the authors, who happen to be from the People’s Bank of China’s Financial Stability Bureau and the Deposit Insurance Corp.
As per the published article, the commercial banks as a whole in China happen to be sound and stable.
The authors confirm that the country must consolidate its capital reserves so as to deal with the financial risks and also make sure that there are substantial resources to dispose of these risks in a timely and efficient manner.