Financial platforms in China should be strictly regulated: former minister of finance

Source: Global Times Published: 2020/12/20 15:58:39

Chinese Finance Minister Lou Jiwei speaks at a press conference on G20 Finance Ministers and Central Bank Governors Meeting at the headquarters of International Monetary Fund(IMF) in Washington DC, the United States, Oct. 7, 2016. Global economy continued to face uncertainty and rising risks, Lou Jiwei said on behalf of the G20 economies on Friday. (Xinhua/Yin Bogu)

Former finance minister Lou Jiwei said on Sunday that if a single digital financial platform takes up too big of a market share, it may eventually lead to a large number of bad loans. 

Speaking during the annual China Wealth Management 50 Forum, Lou revealed that a single financial platform, which he didn't name, has cooperated with several Chinese banks, and lent out trillions of yuan in loans. 

"Actually, regulators could limit the number of cooperative banks with a single financial platform, and ask several platforms to cooperate with the same number of banks, which follow the same regulating standard," said Lou.

In order to prevent a single platform from embroiled in ballooning risks, "We should try to avoid making financial platforms from becoming too-big-to-fail beasts, and prevent the monopoly of a winner taking up all on the market," said Lou.

As the annual tone-setting Central Economic Work Conference concluded on Friday, Lou also stressed that financial innovation must be carried out under the premise of ample prudence administration. 

Some financial technology (fintech) platforms have responded to the new policy drive. According to a media report, fintech giant Ant Group confirmed on Friday that it has "proactively" taken down some online deposit services from its platforms, in accordance with the new regulatory requirements for the internet deposit industry.

JD Digit also announced on Sunday that the JD Finance App has stopped the update of new deposit products and stopped the future purchase of related financial products. JD noted that the company will follow the policy requirements and guidance to improve their services.

blog comments powered by Disqus