China's PBOC Plans New Financial Risk Assessment Framework
- Central bank planning a 'Macro Prudential Assessment' system
- Framework includes stock and bond investments, not just loans
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China’s central bank said it will start gauging risk next year using what it calls a Macro Prudential Assessment system built on examining banks’ capital adequacy ratios.
The People’s Bank of China will closely watch financial institutions’ interest-rate pricing using the system, which should help cut financing costs, according to a statement Tuesday from the central bank. The assessment framework will include investments in bonds and equity, a change from focusing on loans only in the past, according to the statement.