China accelerates local government debt issuance to bolster capital of smaller banks

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BEIJING, July 17 (Reuters) – China’s banking regulator has worked with the finance ministry and the central bank to speed up the issuance of special local government bonds to supplement the capital of small and medium-sized banks, China Banking reported. and Insurance News.

The central government will take multiple measures to bolster the capitalization of small and medium-sized banks and enhance their risk resilience, the official gazette reported on Sunday, citing an unnamed China Banking and Insurance Regulatory Commission (CBIRC) official. ).

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From January to May, small and medium banks disposed of 394.3 billion yuan ($58.4 billion) of non-performing loans, up 107.2 billion yuan from a year earlier, reported China Banking and Insurance News.

To strengthen the capital of small and medium-sized banks, a combined quota of 103 billion yuan of local government special bond issues was granted to the provinces of Liaoning, Gansu and Henan and the northern port city of Dalian in first half of 2022, according to the newspaper.

In the near future, other local special bond issuance plans will be approved, and the aggregate amount of 320 billion yuan is expected to be distributed by the end of August, the newspaper added.

($1 = 6.7565 Chinese yuan renminbi)

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Reporting by Ryan Woo; Editing by Frank Jack Daniel

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