Premier Zhu Stresses Financial Supervision

Premier Zhu Stresses Financial Supervision

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The financial sector of China should focus on strengthening supervision and internal control, rectifying the order and further increasing reform this year, Chinese Premier Zhu Rongji said Monday.

He said at a national seminar on banking, securities and insurance that all this is aimed to establish a modernized financial management system.

Zhu pointed out that in 2000 China saw the best economic situation in years, and the financial sector contributed greatly to turning around the economy.

However, he said the existing problems and potential risks of the financial sector cannot be ignored.

He emphasized that strengthening and improving financial supervision is both the priority of financial work this year and the key to resolving the existing problems. The premier requires the banking, securities and insurance industries to concentrate their efforts on this aspect.

According to Zhu, banks, securities agents, insurance companies and other financial institutions should establish and perfect internal control systems at various levels. They should formulate a system of appraisal of senior executives.

Officials with regulatory bodies, such as the People's Bank of China, China Securities Regulatory Commission and China Insurance Regulatory Commission, should strictly carry out their regulatory work. Those who are irresponsible, slack in supervision or derelict in their duty will be removed from their positions, the premier said.

It is the ultimate goal that by strengthening financial supervision, banks should further reduce bad loans and other financial institutions should improve the quality of their assets and business efficiency, Zhu stressed.

He pointed out that rectifying and standardizing the financial order is an important part of this year's economic work. Efforts should be made to step up supervision and strengthen law enforcement. Financial institutions that repeatedly violate the law and regulations should be dealt with severely or even shut down, the premier warned.

He said that the state will adopt such advanced technologies as information technology to strengthen supervision and control on capital, currency and foreign exchange. Continued efforts will be made to crack down on fraud of foreign exchange and illegal trade of foreign currencies.

Zhu said that the financial sector should continue to carry out a stable monetary policy and improve service this year, the first year China implements its 10th five-year plan for 2001-2005.