China Pledges Better Supervision of Bond Credit Rating Industry

(Bloomberg) -- China’s central bank vowed to improve its oversight of the nation’s bond credit rating industry following a series of defaults by state-backed firms.

People’s Bank of China deputy governor Pan Gongsheng said problems in the industry included inflated credit ratings, according to a statement on the PBOC’s website dated Sunday. Ratings companies should work hard to improve their capabilities and quality of work, he said.

The statement was released following a meeting on Friday that also involved officials from the National Development and Reform Commission, China Banking and Insurance Regulatory Commission, and China Securities Regulatory Commission. The statement didn’t say what specific measures the central bank would take.

A $2.5 Billion Default Shows China’s Lack of Mercy for Firms

A series of state-owned enterprises have defaulted on debt in recent weeks, including Brilliance Auto Group Holdings Co., an automaker linked to BMW AG. Speculation has increased that Beijing will let weaker SOEs fail, especially as the economy recovers from the pandemic-driven slump.

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