Fete fight against fi­nan­cial risks

China Daily (Canada) - - NEWS CAPSULE -

The author­i­ties are demon­strat­ing their firm de­ter­mi­na­tion to erad­i­cate cor­rup­tion in the fi­nan­cial sec­tor and pre­vent fi­nan­cial risks through an in­ten­si­fied crack­down on mal­prac­tices and those who vi­o­late the rules. The tight­ened su­per­vi­sion over fi­nan­cial, se­cu­ri­ties and in­sur­ance reg­u­la­tors and some big State-owned banks over the past year, re­flects the re­solve of de­ci­sion-mak­ers to set up an or­derly cap­i­tal market and keep con­tin­ued high pres­sure on any vi­o­la­tions of the rules.

The in­ves­ti­ga­tion ofXiang Junbo, who was chair­man of the China In­sur­ance Reg­u­la­tory Com­mis­sion, in early April is be­lieved to have sig­naled an in­ten­si­fied ef­fort to curb cor­rup­tion in the fi­nan­cial sec­tor.

Com­pared with other ar­eas, cor­rup­tion in the fi­nan­cial sec­tor con­tains more “tech­ni­cal con­tent” and is harder to detect. The stock market dis­as­ter China ex­pe­ri­enced in 2015 was, to a large ex­tent, re­lated to su­per­vi­sion de­fi­cien­cies and loop­holes in the reg­u­la­tory sys­tem, and was in­sep­a­ra­ble from the cor­rupt prac­tices of a few­peo­ple.

Fi­nan­cial risks usu­ally stem from com­pli­cated fac­tors, but in­for­ma­tion asym­me­try is an im­por­tant rea­son why the fi­nan­cial sec­tor is more sus­cep­ti­ble to cor­rup­tion. The author­i­ties’ in­ten­si­fied ef­forts to fight cor­rup­tion in the fi­nan­cial sec­tor, there­fore, serve as a means to nip fi­nan­cial risks in the bud.

Cor­rup­tion in the fi­nan­cial sec­tor usu­ally in­volves large amounts of money, pro­duces se­vere con­se­quences and causes heavy eco­nomic losses to the coun­try and peo­ple.

From a su­per­fi­cial per­spec­tive, fi­nan­cial risks are caused by lax in­ter­nal con­trol and in­ef­fi­cient ex­ter­nal over­sight, but they are fun­da­men­tally re­lated to such hu­man fac­tors as the mal­prac­tice of fi­nan­cial prac­ti­tion­ers or even cor­rup­tion. The penal­ties meted out to ma­jor cap­i­tal market vi­o­la­tors tes­tify to the author­i­ties’ re­solve to curb such hu­man fac­tors from caus­ing fi­nan­cial risks and safe­guard the red­line of the coun­try’s fi­nan­cial se­cu­rity.

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