Chinese authority is researching on the issue of market exit of high-risk financial institutions and "if qualified, high-risk financial institutions should be allowed to exit the market," said Guo Shuqing, chairman of China Banking and Insurance Regulatory Commission (CBIRC), during the "two sessions", China’s annual gathering of its legislative and political advisory bodies.
Guo specified that high-risk financial institutions refer to those that have run out of capital, lost ability to resist risks and are unable to conduct normal business operations - called as "zombie companies in the financial sector"by some.
Guo's comments came after several senior officials spoke publicly about China's plan to lower risks brought by these high-risk financial institutions and to experiment with bankruptcy in the sector as part of marketisation of China's financial system and supply-side structural reform in the financial sector.
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