China: All eyes on financial stability risks – HSBC

The five yearly Finance Work Conference, led by the State Council, drew to a close on 15th July and the much-anticipated meeting met market expectations of a regulatory overhaul, with the establishment of a committee to co-ordinate financial policies, strengthen accountability and implement functional (and conduct-based) regulations, explains the research team at HSBC.

Key Quotes

“The PBoC, which will assume greater responsibility for macroprudential policy and systemic risk prevention, will likely play a key role at the operational level of the committee. The meeting also highlighted the need to deleverage State-Owned Enterprises in order to reduce economy-wide leverage. The overall tone emphasised the need for the financial system to better serve the real economy. It suggests that monetary policy will be prudent in order to protect the nascent economy recovery, and that policy makers will seek to address structural weakness in the financial system through deeper institutional reforms. The meeting also reaffirmed commitment to RMB exchange rate reforms and capital account liberalisation. The RMB should see greater flexibility - strength in the near term before USD rebound later in the year.” 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.