China must focus on changes in asset prices-c.bank

September 5, 2009

FINANCIAL CHINA BANKS   SHANGHAI, Sept 5 (Reuters) – China needs to pay close attention to changes in asset prices and to push ahead on innovations in financial tools in the next phase of development, People’s Bank of China Vice Governor Su Ning said on Saturday.
   Su told a banking seminar that innovations in financial tools would be in order to adjust banks’ loans growth, but he did not elaborate on the market’s present situation.
   “We must pay close attention to asset price changes and monitor global capital flows,” he said. “We must study how to use regulatory tools to adjust the lending activities of banks.”
   Seeking to head off asset bubbles and a rise in bad debt, Beijing has leaned on banks to slow the pace of lending after a record burst to start the year and has also drafted rules to tighten capital requirements.
   China’s housing market began to rebound in March with prices surging in major cities, prompting concerns that a fresh asset bubble was taking shape.
   China has to address risks arising from complex financial shareholdings of companies, Su noted, such as banks holding assets in funds and insurance companies, and to establish a prompt response so as to avoid another financial crisis. (Reporting by Langi Chiang and Jacqueline Wong; Editing by Alex Richardson)
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Keywords: CHINA ECONOMY/SU 
  
Saturday, 05 September 2009 05:01:30RTRS [nSHA374220] {C}ENDS

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