MNI: China Press Digest, March 15: Bankruptcy Law, Tax, MLF

     BEIJING (MNI) - The following are highlights from the Chinese press for

Thursday: 

     China should introduce bankruptcy laws for financial institutions to keep

financial operations in order and to prevent financial risks, reported Shanghai

Securities News, quoting Bai Hexiang, the head of Xi'an branch of the People's

Bank of China. For example, it would be useful to institute a rule ensuring that

a bank frequently going below a 'standard' capital adequacy ratio will be forced

to go bankrupt, reducing the financial risks brought on by that bank, Bai said.

     Personal income tax reform, which will include increasing the minimum

threshold and adding special fee deductions, will come into effect as early as

the second half of this year, reported Securities Journal, citing multiple

analysts. The effective date will likely fall at any time between September and

December, according to analysts' predictions.

     It is uncertain if PBOC will roll over maturing Medium-term Lending

Facilities (MLF) on Friday, as the PBOC can minimize the impact of maturing MLF

loans by using reverse repo; and it may instead conduct MLF with increased rates

after a very possible rate hike by the U.S. Fed on March 22, reported China

Securities Journal. As the market generally expects PBOC to raise its open

market operations and MLF rates, the potential rate hike will not cause much

fluctuation in the financial system, the report said.

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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