Financial regulators stress virtual economy and its impact

11:19, March 03, 2010      

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"Virtual economy, and its impact on real economy, have become important factors that should be considered in analyzing the economic situation and formulating economic policies, especially monetary policies," Chinese State Councilor and Secretary-General of the State Council Ma Kai said recently.

Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), also expressed his concern about asset prices in a recent interview with Qiushi journal.

"The CBRC will pay special attention to fluctuations of asset prices, restrict speculation in the realty market and curb rocketing housing prices in some cities to prevent price hike of commodities and services."

Industry insiders pointed out that although the changes in virtual economy deviate from the real economy, the real economy will be inevitably affected, as virtual economy may affect market financing and commodity prices.

As for current risk management, Liu stressed that banking financial institutions should keep the bottom lines of capital adequacy ratio, provision coverage, leverage ratio and large exposure risk concentration.

"Large banks should keep their capital adequacy ratios above 11 percent, and small and medium-sized banks above 10 percent." Liu said.

By People's Daily Online
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