Internal reforms refer to establishing good corporate governance, setting up internal control system and risk management system, optimizing credit procedures, updating the information system and establishing clear internal incentives of reward and punishment schemes. The purpose of these reforms is to develop an effective new mechanism to help commercial banks avoid accumulating large amount of new NPLs.
Representatives from the commercial banks must have deeper thoughts on this issue and should be invited to speak on this topic. My speech today will focus on aspects of reform that goes beyond the internal reforms of commercial banks and which cannot be accomplished by the commercial banks alone but rather with the crucial help from other institutions and the whole society.