World BankInternational Monetary Fund2013-09-272013-09-272011-11https://hdl.handle.net/10986/15913This report summarizes the findings of the Financial Sector Assessment Program (FSAP) exercise for China undertaken in 2010 by a joint International Monetary Fund (IMF) and World Bank team. The first mission (June) assessed the observance of selected international standards and codes, and initiated discussions on a broad range of financial sector issues. The second mission (December) completed its review and presented a draft Aide-Memoire along with draft technical and background notes covering a range of topics relevant to China's financial sector. This report points out near-term risks, reform challenges and development opportunities China confronts as it continues to modernize its financial sector. China faces potential vulnerabilities, near-term risks and policy-induced distortions common to an evolving financial system. The challenges and opportunities are not unique, and can be addressed. The author proposes that the authorities could consider carefully sequencing the following reforms and development options: (i) further deepening the commercial orientation of the financial system; (ii) moving to more market-based means of controlling monetary and financial conditions; (iii) further strengthening regulation and supervision; (iv) upgrading the framework for financial stability and crisis management; (v) revising the strategy for financial inclusion to achieve improved access to financial services ; (vi) continuing steps to support a broad based capital market; and (vii) continue to strengthen and deepen the insurance and pension sectors; and (viii)continue enhancement of the financial market infrastructure.en-USCC BY 3.0 IGOACCESS TO CAPITALACCOUNTINGACCOUNTING STANDARDSALLOCATION OF CAPITALALTERNATIVE FUNDINGALTERNATIVE INVESTMENTARBITRAGEASSET MANAGEMENTASSET QUALITYBALANCE SHEETBALANCE SHEETSBANK BONDBANK BOND MARKETBANK BONDSBANK DEPOSITSBANK LOANBANK REGULATIONBANKING SECTORBANKING SECTOR REFORMSBANKING SYSTEMBONDBOND MARKETBOND MARKET DEVELOPMENTCAPITAL GROWTHCAPITAL INFLOWSCAPITAL MARKETCAPITAL MARKET DEVELOPMENTCAPITAL MARKETSCAPITAL RAISINGCAPITAL REQUIREMENTSCAPTIVE INVESTORCLEARING CORPORATIONCOLLATERALCOLLECTIVE INVESTMENTCOMMERCIAL BANKCOMMERCIAL BANK ASSETSCOMMERCIAL BANK CREDITCOMMERCIAL BANK LOANSCOMMERCIAL BANKINGCOMMERCIAL BANKSCOMMODITY PRICESCOMMON MATURITIESCONSUMER PROTECTIONCONTINGENT LIABILITIESCONTINGENT LIABILITYCORPORATE DEBTCORPORATE GOVERNANCECREDIT COOPERATIVESCREDIT DELIVERYCREDIT DELIVERY SYSTEMCREDIT EXPANSIONCREDIT FLOWSCREDIT GROWTHCREDIT MARKETSCREDIT PROGRAMSCREDIT RATINGCREDIT RATING AGENCIESCREDIT RATINGSCREDIT RISKCREDIT STANDINGSCREDITORSDEBT ISSUANCEDEBT ISSUANCE STRATEGYDEBT ISSUERDEPOSITDEPOSIT INSURANCEDEPOSITORSDERIVATIVES MARKETSDOMESTIC CAPITALDOMESTIC CAPITAL MARKETSDURABLEELIGIBLE INVESTMENTEMERGING MARKETEMERGING MARKET ECONOMIESEQUITY MARKETSEXPENDITUREEXPENDITURESFINANCIAL DEVELOPMENTFINANCIAL HEALTHFINANCIAL INFORMATIONFINANCIAL INFRASTRUCTUREFINANCIAL INSTITUTIONSFINANCIAL MARKETFINANCIAL MARKETSFINANCIAL RISKSFINANCIAL STABILITYFINANCIAL SYSTEMFINANCIAL SYSTEMSFISCAL POLICYFIXED INCOMEFIXED INCOME MARKETFIXED INCOME MARKETSFOREIGN BANKSFOREIGN EXCHANGEFUTURE CASH FLOWSFUTURESFUTURES EXCHANGEGOVERNMENT BONDGOVERNMENT BOND MARKETGOVERNMENT BOND MARKETSGOVERNMENT DEBTGOVERNMENT FINANCINGHEDGE FUNDSHOLDINGHUMAN RESOURCESHYPOTHECATIONIMPLICIT GUARANTEESINCOME LEVELSINFLATIONINFORMAL CREDITINFORMAL LENDERSINFORMATION DISCLOSUREINFORMATION TECHNOLOGYINITIAL PUBLIC OFFERINGSINSOLVENCY REGIMEINSTITUTIONAL INVESTORINSTITUTIONAL INVESTORSINSTRUMENTINSURANCEINSURANCE COMPANIESINTEREST RATEINTEREST RATE DERIVATIVESINTEREST RATE POLICIESINTEREST RATE REGIMEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL STANDARDSINVESTMENT ACTIVITIESINVESTMENT VEHICLEINVESTMENT VEHICLESINVESTOR BASEINVESTOR PARTICIPATIONINVESTOR PROTECTIONLEGAL FRAMEWORKLEGAL SYSTEMSLIABILITYLIABILITY MANAGEMENTLIFE INSURANCELIQUIDITYLIQUIDITY MANAGEMENTLOANLOAN RATESLOCAL GOVERNMENTLOCAL GOVERNMENTSLONG-TERM LOANSMACROECONOMIC POLICIESMARKET COMPETITIONMARKET CONFIDENCEMARKET DEVELOPMENTSMARKET DISCIPLINEMARKET INFRASTRUCTUREMARKET INTEREST RATESMARKET MAKINGMARKET PARTICIPANTSMARKET PRACTICESMATURITIESMATURITYMATURITY MISMATCHESMICRO CREDITMICRO-FINANCEMONETARY POLICYMONEY MARKETMONEY MARKETSMORAL HAZARDMUTUAL FUNDSNONPERFORMING LOANSNPLPAYMENT SYSTEMPENSIONPENSION FUNDSPORTFOLIOPOSTAL SAVINGSPRICE FORMATIONPRICE RISKPRICE RISKSPRIVATE EQUITYPRUDENTIAL STANDARDSPUBLIC DEBTPUBLIC SECTOR DEBTRATES OF RETURNREGULATORY FRAMEWORKREGULATORY OVERSIGHTREGULATORY STRUCTUREREPOREPO MARKETREPO MARKETSREPOSRESERVESRETURNSRISK MANAGEMENTRISK MANAGEMENT SYSTEMSRISK POOLINGRURAL CREDITSAVINGS BANKSAVINGS DEPOSITSSECONDARY MARKETSECONDARY MARKET LIQUIDITYSECURITIESSECURITIES MARKETSECURITIES MARKETSSETTLEMENTSETTLEMENT SYSTEMSHAREHOLDERSHAREHOLDERSSOLVENCYSTATE GUARANTEESSTOCK EXCHANGESTRATEGIC INVESTORSTRUCTURAL PROBLEMSSUB-NATIONAL DEBTSUB-NATIONAL DEBT MARKETSSUBORDINATED DEBTTAXTERRORISMTRADINGUNDERWRITERSYIELD CURVEWorld Bank10.1596/15913