China to Advance Risk Resolution at Small and Midsize Local Financial Institutions

On September 10, 2026, the State Council Information Office held a press conference. Cong Lin, deputy head of the National Financial Regulatory Administration, said at the meeting that during the 15th Five-Year Plan period, the administration will advance risk prevention, strengthened supervision and high-quality development in an integrated manner. On risk prevention, it will steadily advance risk control in key areas, prevent and resolve risks at small and midsize local financial institutions, and push such institutions to reduce in number and improve in quality. On strengthened supervision, it will improve the classified and tiered regulatory framework, advance differentiated regulation, strengthen technological support and enhance penetrating supervisory capacity. On promoting high-quality development, it will push financial institutions to coordinate work on the five major articles, increase financial support for consumption promotion, investment expansion, stabilizing enterprises and employment, and technological innovation, strengthen financing guarantees for major national projects and large-scale equipment renewal and consumer goods trade-in programs, focus support on major projects under the 15th Five-Year Plan, optimize comprehensive financial services and help stabilize foreign trade.

Speaking about regulatory considerations for promoting the steady operation of the banking and insurance industries, Cong said the administration will play a guiding regulatory role and push financial institutions to accelerate reform and transformation. First, it will optimize the financial institution system through category-specific measures and support large state-owned financial institutions in serving the real economy and maintaining financial stability. It will push policy financial institutions to focus on serving national strategies and mainly undertake business that commercial financial institutions cannot do or cannot do well. For small and midsize local financial institutions, it will promote consolidation and quality improvement and encourage them to take root locally and conduct distinctive operations. For the insurance industry, it will guide insurers to perform their risk protection and social stability functions. For asset management and non-bank institutions, it will urge them to play a role in improving wealth management, smoothing direct financing and enriching diversified financial services.

Second, it will solidly advance reform and risk resolution at small and midsize local financial institutions, steadily and orderly push forward risk disposal, guide institutions undergoing risk resolution to consolidate reform results and improve professional management and risk prevention capabilities; for institutions with weak risk resistance, it will study ways to integrate resources and enhance strength through various means to achieve forward-looking risk resolution. Third, it will take multiple measures to foster a sound industry ecosystem, guide financial institutions to abandon a fixation on scale, push them to shift from pursuing speed and scale to centering on quality and efficiency, and curb practices such as price wars, illegal rebates and high-interest, high-return offers, while fully implementing the insurance industry's unified reporting-and-execution rule and comprehensive non-auto insurance governance. It will strengthen protection of financial consumer rights, press financial institutions to fulfill their primary responsibilities, and strengthen product suitability management and marketing conduct management. It will continue to strengthen coordination and consultation with law enforcement and judicial authorities, crack down on illegal and gray-market financial activities, and consolidate and expand the results of such efforts.

The administration will guide the banking and insurance industries to improve service quality and efficiency. Next, it will guide financial institutions to support the expansion of commodity consumption, continuously unlock the potential of service consumption and new types of consumption, and strengthen financial support for key areas including major national projects, large-scale equipment renewal and consumer goods trade-in programs, the six networks and the 109 major projects under the 15th Five-Year Plan. It will work to promote the stabilization of foreign trade and support intermediate goods exports, overseas warehouse construction and cross-border e-commerce development. At the same time, it will push to optimize the supply of financial resources in the technology sector, improve policies for insurance funds and other capital to invest early, in small firms, for the long term and in hard technology, and support the development of emerging and future industries. It will expand manufacturing loan disbursement and serve the transformation and upgrading of traditional enterprises. It will help ensure and improve people's livelihoods, vigorously develop commercial pension insurance and encourage health insurance to improve quality and expand coverage.