China should accelerate legislation of the Financial Stability Law and improve other legal arrangements designed to prevent and dispose of financial risks, three officials from the People's Bank of China (PBOC) wrote in China Finance, a publication affiliated with the central bank.
The article said that financial authorities should strengthen the supervision of financial institutions' data accuracy to prevent risks, asking if any enlightenment should be drawn from the Silicon Valley Bank crisis.
China should also let the insurance deposit system play its full role, allowing the mechanism to deal with problematic banks swiftly and orderly to prevent systematic risks effectively, said the authors, who are from PBOC's Financial Stability Bureau and the Deposit Insurance Corp.
China's commercial banks as a whole are sound and stable, the article said.
The authors said China should consolidate the capital reserves for dealing with financial risks to ensure sufficient resources to dispose of risks promptly.
