Top Chinese bank regulators moved to defuse growing unease in the country’s $40 trillion banking system after two small lenders were hit with bank runs in less than two weeks, reported Caixin.
In a briefing on Tuesday, three senior officials of the China Banking and Insurance Regulatory Commission (CBIRC) pledged to contain liquidity risks among the country’s thousands of smaller banks. They addressed incidents involving Yingkou Coastal Bank in northeastern Liaoning province last week and Yichuan Rural Bank in Luoyang, Henan province, in late October.
The regulators attributed the runs to false online rumors and sought to restore confidence on the lenders. The world’s largest banking system has been rattled this year not only by those two incidents but also by earlier crises at three other banks.
“The banking industry is very sensitive,” said Liu Rong, vice department chief of city commercial banking at the CBIRC during the briefing in Beijing. “We should improve the mechanism of liquidity risk management for small and medium sized lenders and fend off systemic financial risks.”