This year, the Central Government of China has established a "stable, neutral" monetary policy, and will focus on the proposed new regulations and macro-prudential assessment (MPA) system, aiming to reduce the leverage of bank and other financial institutions while curbing funds circulating in financial institutions without flowing to real economy. Anbound research team believes that tighter monetary policy in China would result in the continuous rise of the financing costs of financial institutions. Next, once the regulatory policy is officially tightening-up or if there is a shift in the monetary policy, small and medium banks are likely to face liquidity risk, and forced to adjust the balance sheet, or sell their assets, or even facing crisis for unable to sell the assets. In this regard, it is necessary to raise the vigilance on the possible risks and take the necessary actions to slow down the relevant risks.