As part of this, the People's Bank of China recently widened the scope of its quarterly Macro-Prudential Assessment (MPA) of banks to better assess and address shadow banking risks. The MPA now includes consideration of the risks to banks from exposures through offbalance sheet vehicles, including wealth management products.
There have also been efforts to address the significant risks in local government financing, including by increasing transparency. As part of this effort, local governments have been participating in a ‘debt swap’ program, where off-balance sheet debt is swapped for local government bonds. The Ministry of Finance has also tightened off-balance sheet financing channels for local governments and their related entities.