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August 7, 2017

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Huge Internet finance firms to be assessed

CHINA will explore methods to include large Internet financial businesses of systemic importance in its macro prudential assessment, said a central bank report issued late Friday.

The People’s Bank of China, the central bank, will improve its supervisory system and strengthen regulation of Internet businesses, let industry and local associations play a bigger role in supervision, and promote new technology, said the report on regional financial development.

Development of Internet finance has helped broaden the financial reach, improved efficiency of financial services, given Chinese more investment options, and helped some small businesses get badly needed loans.

The first peer-to-peer lending platform opened in 2007, and exploded in popularity, with the number of such platforms increasing 18-fold between 2012 and 2015 and the combined transaction volume jumping about 40 times over the period, said the State Information Center.

On top of P2P lending, Internet finance also covers third-party online payments, crowd funding and other financial services. As a result, risk in the Internet finance industry has wide repercussions.

Authorities have strengthened supervision on businesses such as P2P lending, Internet-based asset management and businesses spanning boundaries, third-party online payment, and advertisements of Internet financial services, the report said.

Since the start of this year, the PBOC has placed financial market practices under MPA for strict control of liquidity risks and maturity mismatch risks.


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