PBC Holds 2019 Financial Stability Conference

On February 21, 2019, the 2019 Financial Stability Conference of the People’s Bank of China (PBC) was held in Chengdu. Under the guidance of the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, participants at the conference studied the spirit of the 19th National Congress of the Communist Party of China (CPC) and the Central Economic Work Conference in a in-depth way, earnestly comprehended the speech on preventing and defusing major financial risks delivered by General Secretary Xi Jinping, firmly implemented the decisions and arrangements of the CPC Central Committee and the State Council as well as the arrangements of the PBC CPC Committee regarding financial stability, and mapped out key areas of financial stability work in 2019, so as to deepen the tough battle against major financial risks. The conference also conveyed the instructions of PBC Governor Yi Gang and Secretary of PBC CPC Committee Guo Shuqing on properly preventing and defusing major financial risks and effectively ensuring financial stability. Zhu Hexin, member of PBC CPC Committee and PBC Deputy Governor attended and addressed the conference.

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The achievements made by the PBC with regard to financial stability was fully recognized at the conference. In 2018, with the support and coordination of local governments and authorities, the PBC financial stability system took on responsibilities with courage, forged ahead with determination, stayed realistic and pragmatic and overcame difficulties, took the battle against major financial risks as the priority among priorities, and coped with various risks and challenges appropriately. As a result, important progress and remarkable achievements have been made in many key areas. Financial regulation system has been further improved, the philosophy of prudent operation strengthened, market discipline gradually enhanced, reckless expansion and other misbehaviors restrained on the whole, and rectification on financial chaos has produced initial effects. Generally speaking, financial operation remained sound and stable, financial risk was brought under control, and the bottom line of no systematic financial risk has been defended, which was a good start for winning the tough battle of preventing and defusing major financial risks.

It was pointed out at the conference that in 2019, financial stability work is facing more glorious yet difficult tasks. The overarching working principle of making progress while maintaining stability should be adhered to. The entire system should strike a delicate balance between ensuring growth and preventing risks and forestall credit risks in key areas. Work should be done to properly resolve shadow banking risks, promote orderly rectification and smooth transformation of the asset management business of financial institutions. Efforts should also be made to handle the risks associated with high-risk financial institutions in an orderly fashion, improve corporate governance of financial institutions, steadily promote the implementation of deposit insurance system, perfect the market-based and law-based financial risk disposal mechanism, clean up order in the financial sector, and resolutely crack down on illegal financial institutions and activities. Measures should also be taken to intensify financial risk monitoring and assessment, dynamically check for financial risks, draw up risk disposal plans, appropriately conduct the rating, stress test and stability assessment of financial institutions, and improve the policy toolbox for financial risk prevention and control. The PBC will also actively take part in the rule-making for international financial supervision, help improve the global financial stability governance system, continue deepening the reform and opening-up of the financial sector, enhance the institutional building of the capital market, and maintain sound operation of the financial market.

It was required at the conference that preventing and defusing financial risks, especially preventing systematic financial risks, should be the fundamental task of the financial work. To ensure good performance in financial stability work, the system must adhere to the unified leadership of the Party for the financial work, more consciously implement the decisions and arrangements of the CPC Central Committee with Comrade Xi Jinping as the core, follow the requirements of the PBC CPC Committee to further enhance political awareness and the awareness for the overall situation, hold the bottom line, strengthen the sense of responsibilities, and fulfill due responsibilities at various levels so that those who are responsible are held accountable and fully assume their responsibilities. It was also required that the entire system practically strengthen integrated coordination, proactively support and assist local governments and authorities to completely motivate relevant parties and give play to the synergy. In the spirit of driving nails and with great sense of responsibility and mission, officials and staff should blaze new trails in a pioneering spirit, immerse themselves in hard work, and perform duties in a courageous and enterprising way to open up new prospects for financial stability work and embrace the 70th anniversary of the founding of the People’s Republic of China with new achievements.

Officials from the PBC Shanghai Head Office, branches and operations offices, central sub-branches of the PBC in capital cities of provinces (autonomous regions) and sub-provincial cities, and relevant departments and bureaus of the PBC attended the conference.