IMF warns on Chinese banks

The International Monetary Fund (IMF) has sounded a warning over the state of China's financial system.

In a publicly released review issued today, entitled the Financial Sector Assessment Program, the IMF said banks would be able to withstand isolated shocks, but not  combined exposure to credit, property and currency risks. "China's banks and financial sector are healthy, but there are vulnerabilities that should be addressed by the authorities," said Jonathan Fiechter, the head of the IMF team that conducted the review. The IMF has urged reforms in answer to these concerns, including freeing up the banks so they are able to rely more on market mechanisms, such as interest rates. T...