BEIJING — China will allow special local government bonds to appropriately support small and medium-sized banks in replenishing capital, in the latest move to strengthen financial support for enterprises.

The country will focus on improving financial services offered to micro, small and medium-sized enterprises, according to a State Council executive meeting presided over by Premier Li Keqiang on Wednesday.

The meeting has decided to grant certain quota to local governments this year to explore new capital replenishment channels for the banks, including subscriptions for convertible bonds.

Accounting for 99 percent of Chinese banks, small and medium-sized banks recently faced mounting pressure in terms of lending capacity and capital consumption due to COVID-19 strains.

“It was a timely and important move for the country to innovate capital replenishment tools for small and medium-sized banks,” said Dong Ximiao, a researcher with the National Institution for Finance and Development.

It is also conducive to enhancing the willingness and ability of small and medium-sized banks to serve the real economy, especially micro, small and medium-sized enterprises and private firms, Dong noted.

The meeting urged local governments to give priority to supporting small and medium-sized banks that are capable of sustainable market-based operations.

In addition, local governments should supervise improvements to the banks’ internal control mechanisms and strengthen oversight when utilizing special local government bonds.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

T-Mobile tops fourth-quarter revenue estimates

(Reuters) – T-Mobile US Inc (TMUS.O) beat Wall Street estimates for quarterly revenue on Thursday, as the U.S. wireless carrier attracted more monthly phone subscribers. The company added 1 million net new monthly paying subscribers in the fourth quarter ended…

Olympus is getting out of the camera business

New York (CNN Business)Olympus is getting out of its 84-year-old camera business. The Japanese imaging company, which makes most of its money from medical equipment, announced Wednesday it will sell its camera business to Japan Industrial Partners — the company…

Lawsuit filed after FDA says tainted lettuce infected 641 people

A lawsuit has been filed against a bagged salad brand after the FDA and CDC linked its product to hundreds of parasite infections in the United States, leading the product to be recalled in June. Tainted salad mix from Fresh…

Computers still aren’t fluent in human speech. IBM is changing that

New York (CNN Business)IBM is commercializing a new technology that makes it easier for computers to understand human communication. Artificial intelligence systems have taken on a growing role in business as their abilities to process and learn from large quantities…