Although risks in the banking system....>

CHINA PRESS: Although risks in the banking system have been reduced due to a

drop in the bad loan ratio in the first three quarters of this year, risks to

the sector's liquidity conditions remain a danger, the official People's Daily

reported Monday.  The newspaper cited Dong Ximiao, researcher at the Chongyang

Institute for Financial Studies at Renmin University, who added that banks'

liabilities mainly derive from short-term debt, such as deposits and bills with

maturities of less than a year. That makes it hard for banks to support their

longer-term assets, like their loans, Dong said. The next step for banks is to

optimize assets and liabilities. Banks also need to be cautious about credit

risks, Dong argued, strengthening controls to keep profits from eroding.

(People's Daily)