PBOC Adviser Ma warns about systemic risk chain reaction on local government debt

In an interview with the Securities Times on Wednesday, Ma Jun, an external adviser to the People's Bank of China’s (PBOC) monetary policy committee (MPC), warned against the looming systemic risks from the failure of local government borrowing platforms.

Key Quotes:

Measures were needed to be taken to prevent systemic risks. 

There could be a chain reaction should defaults be allowed to damage market confidence.

Government could allow local-government financing vehicles with strong fundamentals to take over weaker counterparts.

The comments drew little to no market attention, as the sentiment remains tepid amid trade deal risks and no-deal Brexit fears.