At present, my country's financial risks tend to converge and are generally controllable. In the next step, the China Banking and Insurance Regulatory Commission will enhance risk awareness, adhere to the risk-based supervision principle, estimate risks more comprehensively, prepare more fully for response measures, and resolutely maintain the bottom line of preventing systemic financial risks.
First, shadow banking risks continue to converge. Since 2017, it has focused on rectifying irregular interbank financial management and off-balance sheet businesses. So far, the scale of shadow banking has dropped by about 20 trillion yuan from its historical peak. Some international organizations and professional institutions have spoken highly of it, believing that China has reduced its shadow banking Risks fundamentally maintain the stability of the financial system.
Second, the identification and disposal of non-performing assets have been greatly advanced. At the end of the third quarter, the ratio of commercial banks’ domestic loans overdue for more than 90 days to non-performing loans was 80.2%. Some banks’ loans overdue for more than 60 days were also included in non-performing loans. Regarding the banking industry’s disposal of non-performing loans and new provisions, Liang just mentioned The Chairman has already made an introduction in his opening remarks.
Third, the Internet financial risk situation has fundamentally improved. The number of P2P online lending institutions actually operating across the country has dropped from about 5,000 at the peak to the current three. The scale of lending and the number of participants have declined for 28 consecutive months.
Fourth, financial crimes have been severely cracked down. Solid progress has been made in risk disposal, asset liquidation, recovery of stolen goods and losses, and risk isolation for high-risk financial groups. Improve the regulatory system for financial holding companies and fill the regulatory gaps. The risk management of high-risk financial institutions has achieved initial results.
Fifth, the "grey rhino" that threatens financial security is under control. In the first three quarters, the proportion of new real estate loans in all new loans dropped by 3.7 percentage points compared with the same period last year. We cooperated with local governments to resolve debt risks, while reducing existing risks, and supported local governments to standardize financing through the issuance of local government bonds. In the past three years, banking and insurance institutions have increased their holdings of local government bonds by a total of 11 trillion yuan. Since the beginning of this year, in the face of the impact of the COVID-19 epidemic, the China Banking and Insurance Regulatory Commission has promptly introduced a series of relief measures to fully promote the return of the economy to a normal cycle, plan in advance to respond to the rebound of risks, closely monitor and prevent external risk impacts, and effectively prevent sudden emergencies. Public health events have triggered major financial risks.
The first is to proactively respond to the rebound of non-performing assets. Banks are urged to properly classify assets, truly expose non-performing assets, make adequate provisions, and speed up disposal. At the same time, we will strengthen internal control and risk management to prevent the rapid rise of new non-performing loans.
The second is to advance the reform and risk resolution of small and medium-sized banks in an orderly manner, consolidate the responsibilities of all parties, and promote orderly progress in accordance with the principle of "one enterprise, one policy" for institutions of different types and different risks, and broaden risk disposal and sources of capital replenishment, replenishing capital through multiple channels.
The third is to continue to improve the shadow banking regulatory system and risk monitoring system, continue to dismantle high-risk shadow banking businesses, and strictly prevent a rebound.
The fourth is to severely crack down on illegal financial activities, resolutely rectify all kinds of financial chaos, and create a clean and upright financial order.
The fifth is to strictly guard against external imported risks, formulate risk response plans, and reserve sufficient response measures.
The sixth is to improve the regulatory framework that covers all risks. Enhance the penetration, uniformity and authority of supervision, fully incorporate financial activities into supervision in accordance with the law, and treat similar businesses and entities equally.