Home / Business / Finance

Top regulator urges banks to act on risks

By Li Xiang | China Daily | Updated: 2017-03-16 07:16

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.

Top regulator urges banks to act on risks

Guo Shuqing, chairman of the China Banking Regulatory Commission. [Photo provided to China Daily]

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 of China, 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.

Most Viewed in 24 Hours
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349