On December 19th, members of Financial Sector Assessment Programme at IMF visited our School. FSAP members and ZHOU Hao, Associate Dean and Unigroup Chair Professor of PBCSF, shared their insights on hot issues including China’s macro-economy and macro prudent. The discussion was joined by 5 members of FSAP: HUI Miao, Chikaka Baba, Mario Catalan, Naomi Griffin and KAI Yan, and researchers from Tsinghua University National Institute of Financial Research Monetary Policy and Financial Stability Research Center.
Professor ZHOU first introduced his research on Chinese financial institutions’ systemic risk. He pointed out that, on the macro-economic level, Chinese systemic risk has reduced significantly and constantly, which partly due to the stabilizing tendency of Chinese macro-economic index and steady improvement of local government debt replacement. On the micro level, systemic risks of large state-owned banks, brokers, and insurance companies are reducing, while some mid-sized banks’ risk index remains at a high level or even higher, which also requires close attention. In the case that some institutions’ calculation and research does not reach the same conclusion, ZHOU explained that his risk calculation is based on the latest data of Chinese financial markets, while some institutions’ index, e.g. Non-performing Loan Ratio (NPL), default rate and debt to GDP ratio, is relatively out dated. Besides the risk index calculation, ZHOU also explained the declining of systemic risks from Chinese macro-economic data. He thinks the rising of primary industry, retail industry, wholesale industry and PMI indicates the recovery of the Chinese entity economy, which lowers the systemic risk.
After the report, presented experts also carried out in-depth and heated discussions over the interested topics, including Chinese economy deleverage, RMB exchange rate and China’s capital account control, and China's financial regulatory structure.
After the discussion, FSAP members also shared their views and suggestions over the issues with Professor ZHOU and other researchers.
The Financial Sector Assessment Program (FSAP), established in May 1999, is an assessment program conducting comprehensive and in-depth analysis of a country’s financial sector. FSAP assessments are the joint responsibility of the IMF and World Bank in developing economies and emerging markets and of the IMF alone in advanced economies. China officially started FASP in Aug. 2009.