Financial stability needs to be China’s top priority, says IMF
Beijing — China should prioritise financial stability above development goals, as pursuit of regional growth targets and helping firms avoid heavy job losses had led to a surge in debt, particularly at local government level, the International Monetary Fund said. Noting a lack of co-ordination and inadequate systemic risk analysis in a report released on Wednesday, the IMF also recommended the formation of a financial stability subcommittee comprising the central bank and three financial regulatory agencies, and an increase in staff for the banking watchdog. Since the IMF’s last assessment of the Chinese financial sector’s resilience to shocks and contagion in 2011, two concerns remain — that credit growth remains high, and the expansion of wealth management products, said Ratna Sahay, deputy director of the IMF’s Monetary and Capital Markets Department. "Risks are large," Sahay told reporters during an online briefing. "Having said that, the authorities are really aware of risks an...
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