China to create national financial database to fend off systemic risk

BEIJING (Reuters) – China will launch a five-year plan to build a national financial database with a focus on cross-sector products and important institutions including holding firms, in Beijing’s latest measure to curb systemic financial risk, the cabinet said on Monday.

The State Council added it will also create a balance sheet for the entire financial system covering banking, securities and insurance institutions and use it as the foundation for macro-economy leverage estimation, according to a guidance released online late on Monday.

The existing system lacks sufficient monitoring and risk warning of certain key areas that “operate beyond the statistics system”, such as cross-sector financial activity, systematically important financial institutions and financial holding companies, the cabinet said in the statement.

“To fend off systematic financial risk, we must have warning and monitoring data of higher quality and effectiveness,” the statement said.

The People’s Bank of China will lead the effort and set up a work team to coordinate with other financial regulators.

From 2018 to 2019, the government will improve statistics of key areas including asset management products, systematically important financial institutions, financial holding companies, as well as bond, currency and foreign exchange markets to more effectively identify system-wide risks, it said.

From 2020 to 2022, the government will set up statistics and monitoring schemes to watch local financial organizations and online finance firms for the creation of an advanced and complete national financial database.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.