China issues guidelines to bolster risk management

China's top banking regulator issued guidelines to strengthen risk management and guard against financial turbulence as it urged domestic banks on Saturday to draw lessons from U.S. financial woes.

'We must definitely draw lessons from the U.S. financial crisis, be more prudent, do our own business well, lay a solid foundation and solidly improve our risk management capabilities and competitiveness,' China Banking Regulatory Commission (CBRC) chief Liu Mingkang said in a notice posted on the agency's website on Saturday.

Liu issued five guidelines ranging from strengthening internal controls to bolstering rural finance.

'Strengthen risk prevention in foreign investment to positively respond to international market turbulence,' Liu said.

The guidelines come as China's top economic planners consider whether to take firmer steps to boost domestic demand as a global financial turmoil has hit exports, production and profits in coastal areas.

Banking and regulatory sources told Reuters last week the regulator was toughening capital adequacy requirements for certain lenders to contain risks as the global financial crisis escalates.

http://www.forbes.com/afxnewslimited/feeds/afx/2008/10/18/

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China issues guidelines to bolster risk management