Rachel Hou/Shanghai Daily news

Shanghai's financial sector was found to have improved its ability to handle risks, said a report released by China’s central bank.

“The central government’s financial reforms have achieved dramatic effect in Shanghai,”said the report, which was issued by the Shanghai headquarters of the People’s Bank of China on Monday.

According to the report, Shanghai’s financial sector is making steady progress and its ability to hedge against risks has improved dramatically.

Shanghai’s banks, stock exchange and insurance agencies are growing rapidly, said the report. In 2006, total assets of local financial institutions grew 19.1 percent and combined profits grew 14.4 percent.

Meanwhile, the risk-resistant ability of local banks has improved. The average bad-debt rate of local banks dropped 0.55 percentage points to 2.51 percent last year. Chinese banks in Shanghai have seen a decrease of bad debt for five consecutive years and bad-loans disposal has increased.

Shanghai’s stock market made breakthroughs last year as the split-share reform of listed companies took effect. The profit of local brokerages has increased dramatically after years of treading water, said the report.