CNR:

We all know that the reform of small and medium banks is important in the supply-side structure reform of the Chinese financial sector. Currently, common problems found in small and medium banks relate to the lack of core competitiveness, relatively high risks, and inadequate capital. What has the CBIRC done to tackle these issues since last year? 

Xiao Yuanqi:

In fact, during his answers to related questions and report just now, Mr. Liang has given you a relatively comprehensive introduction to the reform of small and medium-sized banks and other reforms. Let me just add a few points.

Last year, we took the reform of small and medium-sized banks as an important task and achieved several results. First, the structure of the entire banking system has been further optimized, leading to the establishment of a system with entities of different scales and different characteristics, each of which can support and complement one another. The system includes some very large banks, such as the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and Bank of Communications. These four banks are all globally important banks, ranking among the top in the world in terms of scale and business diversity. There are also medium-sized banks, and some very small regional banks, even community and village banks. In short, by optimizing the banking system's structure and creating a diversified and distinctive banking system with wide coverage, the system can now provide the real economy and broad consumers with convenient, cost-controllable and comprehensive financial services.

Second, we further clarified the development direction of small and medium-sized banks. Small and medium-sized banks and regional banks must take several steps. The first is to develop locally. They cannot do business all around the country, and in principle, should only develop locally. The second is to focus on small and micro enterprises, the three rural subjects of "agriculture, rural areas and farmers," and personal financial services in order to meet the financial needs of local enterprises and residents. The third is to conduct inclusive finance, especially filling in for some weak links and fields. This is where the advantages of small and medium-sized banks lie, and it is also the mission they should undertake. Small and medium-sized banks must be able to resist the temptation to blindly grow bigger, should take root in the local areas, and should focus on being small, detail-oriented and solid.

Third, we have done a lot of work in corporate governance. Mr. Liang has already introduced this work, so I won't repeat it.

Fourth, we have further clarified the responsibilities of small and medium-sized banks in strengthening CPC leadership, operation management and supervision. The operation of banks is the responsibility of each bank's managers. In particular, the board of directors bears the ultimate responsibility, and shareholders must perform their responsibilities. Local Party committees and governments should bear the leadership responsibility of the Party, while also having the responsibility to maintain local financial stability. The regulatory department is responsible for regulations.

Fifth, we have made great efforts to replenish the capital of small and medium-sized banks and consolidate their capital strength. Thank you.