The banking industry should pay attention to risk control as the country strengthens its macro-control of the economy, said Shen Liantao, chief consultant of the China Banking Regulatory Commission, in Xiamen, East China's Fujian Province.

The government's stronger grip on macro-control resulted in the slowdown of the economy and declined earnings of enterprises, increasing pressure on non-performing assets for banks, he said. Big banks will optimize its structure of credit business and ease off inferior loan projects. Less cautious small- and mid-banks will expand credit and may become loan risk undertakers.

The influence of market risk on the banking industry should be researched. The adjustment of exchange rates and interest rates will affect banks' capital prices and commercial banks' operation and management. Commercial banks should verify its anti-risk ability through more accurate assessments.

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Another aspect is the relationships between setting aside funds for loan loss provisions, profit-making, and risk-undertaking. Most banks establish loan loss provisions in their respective headquarters, but profits are made in branches and sub-branches, which is why branches can hide their credit risk.

Excess liquidity promotes the price rise of assets including real estate. The value of the ban's mortgage assets also increases, which makes it easier for banks to deal with non-performing loans. Finally, banks should share enterprises' financial information to prevent risk.

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