Moody’s: Outlook for China's banking system changed to stable from negative

Reuters out with the latest report from Moody's on China’s banking sector, highlighting the following:

Outlook for China's banking system changed to stable from negative

Revision reflects expectations that nonperforming loan formation rates will be relatively stable at current levels

Stable outlook is based on assessment that government's adoption of more coordinated policy measures to curb shadow banking

Expect government to remain key shareholder of major banks, to be committed to providing strong support in times of stress

Says on operating environment, conditions are stabilizing, helped by gov policies to support growth and reduce systemic financial risks

China's banking says that asset risks will moderate over next 12-18 months, while capitalization will stay stable