China Needs 'Super Balance Sheet,' ICBC Chairman Says

     BEIJING (MNI) - Yi Huiman, the chairman of Industrial and Commercial Bank

of China (ICBC), said Thursday at a forum in Beijing that China needs to

establish a "super balance sheet" to manage its financial sector problems.

     As financial markets develop, Yi said, traditional indicators like M2 money

supply and deposit-to-loan ratios cannot effectively reflect the real financial

situation and structure of a country, and the problem of different criteria

being applied when compiling financial data begins to stand out. 

     Such a problem negatively affects policy judgements, macroeconomic

regulation and financial regulation, Yi said.

     A "super balance sheet" is a financial report system that would cover all

on-balance-sheet and off-balance-sheet activities, as well as all domestic and

foreign stock flows, spot and futures trading, and other indicators, Yi said.

     It would aim to reflect the overall financial operating situation and

provide effective data support for regulators, Yi said.

     Yi also mentioned four problems that have increased the fragility of the

financial system, including overly abundant financing and financial innovation,

regulation arbitrage and some money market funds that actually serve as banks.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

[TOPICS: M$A$$$,M$Q$$$]