The Morning Risk Report: China Bank Probes Point to Governance Issues

by Samuel Rubenfeld for The Wall Street Journal

China’s high-profile anti-corruption drive has turned its head toward the nation’s financial sector, as multiple reports noted this week, all of which pointed to the questioning of a senior executive of one bank and a board member of another regarding possible corruption. To that end, Beijing’s anti-graft authorities recently formed a department to focus mainly on the financial sector, the Wall Street Journal reported Tuesday, citing Chinese officials familiar with the matter.

Fitch Ratings, in a statement on Tuesday, said the investigations of the two bank leaders shouldn’t greatly affect their employers, but they do “underscore broader issues” of governance, management and political risks at China’s banks. The agency said its ratings for China’s banks “already reflect a degree of risk related to weak corporate governance,” and that a lack of transparency, as well as nascent regulatory and legal systems, are a sector-wide constraint on ratings. ”These events…could be a precursor to a wider investigation into corporate management. If so, as far as the financial sector is concerned, it has the potential to enhance transparency and improve governance standards in the long run–which would be credit positive,” said Fitch. Read more here.

0 Responses to “The Morning Risk Report: China Bank Probes Point to Governance Issues”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Blog coordinator

Cefeidas Group

Archives

cgl-med-linked-in

cgl-med-linked-in
free counters

%d bloggers like this: