China's financial market is running.....>

CHINA PRESS: China's financial market is running smoothly, and the small and

medium-sized banks are stable with sufficient capital, provisions and ample

liquidity, said the PBOC-run newspaper Financial News citing Pan Gongsheng,

deputy governor of the central bank. By the end of Q1, the balance of

provisions, which small banks set aside for possible losses, increased 18% y/y

to CNY1.54 trillion, and the banks' ability to withstand risks increased

significantly, the newspaper cited Pan as saying. The PBOC will use various

monetary policy tools to keep liquidity ample, continue to lower reserve

requirement ratios for small banks, expand the scale of refinancing and

rediscounting, and encourage small banks to issue more bonds to better serve

small companies, the newspaper said citing Pan.

**NOTE: Pan made the comment to calm the market after the central bank had

seized the control of a failing small bank, Baoshang Bank, located in Baotou,

Inner Mongolia autonomous region.