FinTech: More Stern Rhetoric On Regulation Of Chinese Fintechs From Premier Li Keqiang
Stricter oversight and broader anti-monopoly measures against fintechs are on the cards.
Chinese Premier Li Keqiang said at the opening of the National People’s Congress today that Chinese regulators will further tighten supervision of the country’s financial holding companies and its fast-growing fintechs. He also warned that the government will deepen its efforts to discourage monopolies and the use of capital as an anti-competitive tool. (THE STRAITS TIMES)
Li Keqiang: Fintechs under a scanner
“We will improve the mechanism for managing financial risks, see responsibilities are fulfilled by all the stakeholders, and ensure that no systemic risks arise,” Li said. “Financial institutions must serve the real economy.”
The authorities have suddenly realized the potential for risks to the economy arising from the breakneck and unbridled growth of fintechs such as the Jack Ma-controlled Ant Group and Tencent Holdings Ltd’s Wechat Pay.
Li said that the fintech sector should be developed in a “prudent” manner. Under a regulatory blueprint for the period 2021 to 2025, there would be checks and balances that would fix or suspend “innovative” financial products if the need be.
China’s US$53 trillion financial services industry is plagued by soured and over-leveraged property loans, dubious wealth management products and fraudulent P2P lending systems.
No favoritism, says CBIRC head
On Tuesday, Guo Shuqing, head of the China Banking and Insurance Regulatory Commission (CBIRC), said at a news conference that Chinese financial technology companies (fintechs) such as micro-lenders, consumer finance firms, and digital banks have only two years to shore up their capital in line with regulatory requirements.
He hinted that fintechs can no longer get away with the kind of cozy arrangements they had with banks earlier: “As long as Internet platforms conduct financial operations, the requirement of capital adequacy ratio on them should be the same as other financial institutions.”
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