China Daily:

In the first half of the year, in which areas did the PBC increase risk prevention and management? What results have been achieved? What is the risk management situation of high-risk financial institutions? What is the focus of work in the second half of the year? Thank you.

Sun Tianqi:

Thank you for your questions. Under the strong leadership of the CPC Central Committee and the State Council, the PBC, together with relevant departments and local governments, followed the basic principles of maintaining overall stability, ensuring coordination, implementing category-based policies, and defusing risks through targeted efforts, fought a tough battle to prevent and defuse major financial risks, and achieved important phased results. The rapid rise in the macro leverage ratio has been effectively curbed. We resolutely disposed of high-risk enterprise groups and high-risk financial institutions, comprehensively cleaned up and rectified the financial order, and effectively reduced the risks of "shadow banking." Financial anti-corruption efforts have been significantly intensified. We strengthened our financial services to serve the real economy and effectively responded to many challenges, such as the COVID-19 pandemic. On the whole, financial risks are restrained and generally controllable, while 99% of banking assets are within the security boundary, and the central bank ratings of most small and medium-sized banks are within the security boundary.

Facing the current complex international and domestic economic and financial situation, financial administration departments must maintain a high degree of vigilance against various financial risks, further lay a solid foundation for preventing and defusing financial risks, and firmly hold the bottom line that systemic financial risks do not occur. The first is to further improve the effectiveness of micro-prudential supervision, continue strengthening the conduct supervision of the financial industry, and strengthen protections for consumers and investors. The second is implementing different classified policies and continuously resolving key financial institutions' risks. The third is to discover early all kinds of illegal business activities that the people detest deeply, identify them accurately, and act resolutely. The fourth is to continue to replenish the capital to small and medium-sized banks through various channels such as local government special bonds, improve corporate governance, and reduce the number of high-risk financial institutions. We will strive to reduce the number of high-risk financial institutions nationwide to fewer than 200 by the end of the 14th Five-Year Plan period. Thank you.