March, 05, 2010

The nation's top regulator and executives at two of its four top banks offered comments on Friday aimed at easing concerns that troubles could be looming for China's banking sector, as top officials met for the China's National People's Congress in Beijing.Liu Mingkang, chairman of the China Banking Regulatory Commission, said the pace of bank lending has stabilized and that banks' loan books are now safe and sound, as a number get set to raise new funds to bolster their balance sheets.

"I don't think there is any problem, and the capital market is very cooperative," said Liu, responding to questions about the flurry of recent fundraising plans.Liu added that China will introduce additional capital requirements on banks if the economy overheats, in what would become the latest in an ongoing series of measures to rein in lending.On the eve of China's New Year holiday last month, the People's Bank of China raised banks' required reserve level for the second time this year, sending clear messages to banks that it wants more reasonable bank lending and it is paying close attention to inflation.

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