Commercial banks in the Yangtze River Delta have agreed to build regional financial integration, aimed at a free flow of financial resources to accelerate the already booming economy of southeast China's economic hub.
At the first Finance Forum of the Yangtze River Delta, jointly held by the governments of Shanghai and Jiangsu and Zhejiang provinces and the People's Bank of China (PBOC), 14 city commercial banks signed a strategic cooperation agreement on Monday to strengthen cooperation in monetary transactions, settlement services, product innovation and risk management.
They included the Bank of Jiangsu, the Bank of Shanghai, the Shanghai-listed Bank of Nanjing, and other city banks based in surrounding areas, including Ningbo, Hangzhou and Wenzhou.
The move aimed to establish a platform for institutional coordination in the banking system.
"Each bank develops its own information and finance systems. Each bank promotes its own credit cards. It has not only caused a huge waste of resources, but baffled the growth of the banking industry." said Wang Shihao, vice president of the Bank of Shanghai.
He called for cooperation in fields such as financial product research and development, employee training, and credit card promotion among different city commercial banks.
Four state-owned commercial banks, including the Bank of China, the Industrial and Commercial Bank of China, China Construction Bank and the Agricultural Bank of China, have already initiated "cross-region business", with each bank coordinating its own banking transactions in different provinces and cities.
"But to build up the financial environment and conditions necessary for further cooperation, we need external guidance and regulation from the government," Huang Zhiwei, board chairman of the Bank of Jiangsu said.
Local governments, the central bank, administrative departments and financial institutions needed to cooperate in establishing an external coordination mechanism, so as to improve efficiency in the financial system, said Huang.
(Xinhua News Agency April 23, 2008)