The IMF and the World Bank will regard the publication of its report on the first Financial Sector Assessment Programme, or FSAP, for China on Tuesday as something of a triumph.
Pre-crisis, China (along with the US) refused to undergo the programme, which serves as a health check on a country’s financial network. Now, they are compulsory for those financial networks deemed systemically important.
That’s to be applauded; the more that is done to warn of risks to financial stability, the better. But the People’s Bank of China’s response to the exercise highlights its limits. Read more