China to set up deposit insurance system to protect bank customers: PBoC

BEIJING (AFX-ASIA) - China plans to set up a deposit insurance system to protect bank customers against bankruptcies in the banking sector, Business Weekly reported, citing Wu Xialiang, vice governor of the People's Bank of China.

	    Wu was quoted as saying that with the proliferation of commercial banks over the past decade, and increasing competition and diversification of the shareholding structure of banks over the last few years, it has become "conceivable that banks may go bankrupt".

	    She said the central bank is carrying out research and will set up an  insurance system as soon as possible.

	    Since the 1980s, a number of smaller banks, including city commercial and foreign funded banks have been set up, but they are still struggling to compete with the big four state-owned banks, the paper said.

	    Wu was also quoted as saying an insurance system will provide them with much needed help to compete with the big four.

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