China's financial regulatory authorities are taking precautions against the risks that individual high-risk small and medium-sized banks may continue to expose. Two sources familiar with the situation disclosed that the CBRC is studying and preparing for the possible merger and reorganization of high-risk small and medium-sized banks by large asset management companies (AMC).
"Regulation has solicited our opinions and ideas. Specifically, it is still under study. It is hoped that AMC will make some preparations in advance in the form of takeover or merger and acquisition reorganization." A source said.
Another source said that in the study, but not yet implemented, all in accordance with regulatory requirements.
Reuters contacted the China Banking and Insurance Regulatory Commission for the above information, but was not immediately available for comment.
A top four AMC executives told Reuters that some local financial institutions are increasingly risky and exposed against the cycle. Banks and AMC have advantages in participating in restructuring. Previously, the four ACMs have invested in some commercial banks in order to seek full license. They are very familiar with the policies and regulations of custody and supervision from the technical level, and have the experience to operate small and medium-sized banks in a relatively market-oriented way.
"The biggest problem of local banks is that local governments intervene too much. Many loans are really helpless. From the perspective of corporate governance, they are not a truly modern enterprise. The four AMC custodians will make the bank's problems converge and restrict. According to the above-mentioned executives.
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