China updates rules for bank's risk management

CHINA - China's central bank has updated guidelines on internal risk management in an attempt to further coax commercial banks into reducing credit risk.

China's state-run banks are lumbered with a huge number of nonperforming loans due to a former policy of lending on behalf of the government to support inefficient state firms.

Since 1998 China's government has been trying to shift banks onto a more commercial footing that requires greater reliance on internal controls to evaluate credit risk.

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