China’s top banking regulator said Thursday that the country’s lenders are well positioned to withstand the global financial crisis, Reuters reported. Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), highlighted the important role banks have played in boosting the domestic economy through loan growth. He also promised that the government would take steps to prevent a rise in bad debt. These steps will include close examination of new loans as well as tighter regulation of the banks’ overseas investments. China’s banks lent US$164 billion in January, a monthly record. Analysts expressed concerns that this could lead to a rising proportion of non-performing loans (NPLs) on the banks’ books. The sector average NPL ratio dropped to 2.45% in 2008, down 3.71 percentage points year-on-year. This was largely due to a write-off of US$117 billion of bad loans held by Agricultural Bank of China.
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