On Monday, in a statement state-owned Shanghai Securities News said citing a central bank official, with high-carbon industries pulling out of China is likely to lead to a possible re-evaluation of invested financial resources; it is also likely to strengthen inherent financial risks.
Unless authorities pay close attention to changes in macro-leverage ratios and conduct stress tests on the financial systems along with comprehensive and accurate risk assessments systemic risks are likely to increase, said Wang Xin, head of the research bureau at the People’s Bank of China.
The central bank will also “study the establishment of a dynamic risk warning mechanism for financial institutions, which would trigger early intervention from deposit-taking institutions and insurers to problematic financial institutions,” said Wang.
Xi Jinping who heads the ruling Communist Party governing China has pledged to make the country “carbon neutral” by 2060, as part of an effort to battle climate change.
Chinese officials have warned that carbon dioxide emissions should peak by 2030.