Thread by @ChinaFinance40

1/6 What lesson can Baoshang Bank crisis teach us? How to improve efficiency and efficacy of current management system of the small and medium-sized banks in China? Please read a current commentary from Liu Xiaochun. mp.weixin.qq.com/s/7sQMVTgDUWsc…

2/6 China has a large number of SMBs, and most of them are urban commercial banks, rural commercial banks and rural credit cooperatives. Different banks have distinct characteristics of regional economic development, local culture and history, as well as business styles.

3/6 Commonly speaking, SMBs in China face three major risks, namely risk of asset quality, #liquidity risk (caused by maturity #mismatch, mismatch between asset and liability, and mismatch between on-balance-sheet and off-balance-sheet businesses) and corporate governance.

4/6 It doesn’t mean banks can't survive given the above three risks. The key function of banks is managing risks, which further includes: First, respect business rules, and management shouldn’t be government-oriented. Second, shareholders of banks should be clearly clarified.

5/6 Three, managerial level of banks should stress on the credibility building, expanding the customers base. Four, high-level bankers should build up the idea on active and asset-liability management. Five, SMBs should find most compatible customer basis and management styles.

6/6 Six, perfecting concentrated risk management system at the regulatory level. Seven, setting up corporate-oriented banks to firmly support the SMEs. Eight, encouraging eligible market players to merge or exquisite SMBs without bailout promise.