Top reg­u­la­tor urges banks to act on risks

China Daily (Canada) - - VIEWS - By LI XIANG lix­i­ang@chi­nadaily.com.cn

China’s top bank­ing reg­u­la­tor on Wed­nes­day urged banks to draft new rules on their wealth and as­set man­age­ment busi­nesses and to more tightly con­trol risky lever­aged in­vest­ments.

Guo Shuqing, chair­man of the China Bank­ing Reg­u­la­tory Commission, said the reg­u­la­tor will step up ef­forts to en­sure funds raised from the wealth man­age­ment prod­ucts sup­port real eco­nomic ac­tiv­ity and pre­vent risks from the mis­match­ing of banks’ as­sets and li­a­bil­i­ties, as well as risky lever­aged in­vest­ments.

Guo made the com­ments in a speech at a meet­ing of the China Bank­ing As­so­ci­a­tion. The as­so­ci­a­tion re­leased a re­port on ser­vice im­prove­ments in the Chi­nese bank­ing in­dus­try, which co­in­cided with World Con­sumer Rights Day.

Guo said that banks should act in a timely man­ner in ac­cor­dance to the guide­line re­cently is­sued by the Peo­ple’s Bank ofChina, to reg­u­late their surg­ing wealth and as­set man­age­ment busi­ness.

The em­pha­sis on tighter reg­u­la­tion of the as­set man­age­ment busi­ness un­der­scored the shift in fo­cus to con­tain­ing sys­temic fi­nan­cial risks and as­set bub­bles by the cen­tral gov­ern­ment.

The bank­ing reg­u­la­tory chief also said that the sec­tor should of­fer greater fi­nan­cial sup­port to smaller com­pa­nies.

“Of­fer­ing ef­fec­tive sup­port to the real econ­omy and pro­vid­ing bet­ter ser­vice to the clients are the most im­por­tant stan­dards to mea­sure the suc­cess of the bank­ing in­dus­try’s re­forms,” Guo said.

Guo also urged the banks to strengthen the pro­tec­tion of in­vestors’ in­ter­ests.

“The banks must ex­plain clearly to their clients the na­ture of the in­vest­ment prod­ucts, the un­der­ly­ing as­sets as well as the po­ten­tial risks,” Guo said.

Zeng Gang, di­rec­tor of bank­ing re­search at the In­sti­tute of Fi­nance and Bank­ing at the Chi­nese Academy of So­cial Sci­ences, said that Guo’s state­ment re­flected the greater at­ten­tion of the gov­ern­ment on pre­vent­ing fi­nan­cial risks and pro­tect­ing in­vestors’ in­ter­ests.

“We are ex­pect­ing more poli­cies and new rules to be rolled out soon to fill the reg­u­la­tion gap and to bet­ter pro­tect in­vestors’ in­ter­ests,” Zeng said.

Guo Shuqing, chair­man of the China Bank­ing Reg­u­la­tory Commission

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