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China’s Banking Reform: Problems and Potential Solutions


  • Xiaosong Zeng
  • Charles Goodhart



China’s financial system has been undergoing major reforms during the last decade, with the aim of establishing a modern commercial banking system and the development of stock market(s). In recent years there have been large capital injections into ailing state-owned banks, and currently encouragement for them to explore IPOs, as well as bail-outs of bankrupt securities firms by state-owned investment companies. We acknowledge the considerable progress already made in reforming the banking system, but we feel that there are still questions that need to be asked. For example, exactly what is the core of the fundamental problem(s) with the banking system in China? What is the best path to take to address such problems?

Suggested Citation

  • Xiaosong Zeng & Charles Goodhart, 2005. "China’s Banking Reform: Problems and Potential Solutions," FMG Special Papers sp163, Financial Markets Group.
  • Handle: RePEc:fmg:fmgsps:sp163

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    References listed on IDEAS

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    5. Fan, Wei & White, Michelle J, 2003. "Personal Bankruptcy and the Level of Entrepreneurial Activity," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 543-567, October.
    6. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    7. Garry J. Schinasi, 2003. "Responsibility of Central Banks for Stability in Financial Markets," IMF Working Papers 03/121, International Monetary Fund.
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