According to the China Banking and Insurance Regulatory Commission report, Liaoning authorities have investigated 63 top leaders of small and medium-sized banks.
Apollo News reported that the province only has 76 banks of this size across the region. These alleged leaders all have a significant influence on Liaoning’s financial system.
Apollo reported that these banks had witnessed sharp declines in profit margins and sharp rises in bad debt. In addition, these types of banks often have loose regulatory systems under local governments’ influence.
Apart from these issues, many problems have not yet been exposed.
According to the China Banking and Insurance Regulatory Commission, most of these small and medium-sized banks were restructured from urban credit cooperatives and rural credit cooperatives.
Liaoning is just one among many provinces and cities that have uncovered frauds in the rural credit cooperatives system.
Liaoning’s financial system crisis started with the voluntary turn-in of Liu Wenyi, the Liaoning Regulatory Bureau’s former second-level inspector. Following Liu’s surrender, several officials were fired.
Since the 19th National Congress, the China Banking and Insurance Regulatory Commission (CBIRC) system has reported 630 cases of alleged violations. Eighty-three people have been found not guilty and keep their jobs, while 73 have been transferred to the judicial branch for trials.