China is inspecting the country’s financial regulators, largest state-owned banks, insurers and bad debt managers for the first time in six years to root out corruption in its $ 54 trillion financial system.
A team led by the Central Commission for Discipline Inspection will begin a two-month anti-corruption audit with the China Banking and Insurance Regulatory Commission and will accept whistleblower complaint reports until Dec. 15, a statement said. published Monday evening.
CBIRC Chairman Guo Shuqing said the move reflected the Communist Party’s emphasis on financial regulation and told his staff that cooperation with inspectors would be their top priority at the moment.
The banking regulator is among 25 financial organizations examined in the eighth round of checks by the ruling Communist Party since 2017. While previous tours covered other central and local government agencies and state-owned companies, the last zeros on entities including the People’s Bank of China, the China Securities Regulatory Commission, the Shanghai and Shenzhen Stock Exchanges, the largest state-owned banks, as well as bad debt managers, including China Huarong Asset Management Co.
The move underscores the party’s increasingly tough stance against corruption among executives and business leaders. More than 1.5 million government officials have been punished in the years-long campaign, including the execution of Lai Xiaomin, former president of Huarong, and the life imprisonment of Hu Huaibang, l former president of the country’s largest political bank.
PBOC, State Administration of Foreign Exchange, sovereign wealth fund China Investment Corp. and Huarong issued similar statements on Tuesday announcing the start of their inspections. Inspection team leaders stressed the need to prevent âsystematic financial risksâ, while senior officials from inspected agencies pledged to cooperate fully.
Chinese financials were mixed at the close on Tuesday in Shanghai, with the Agricultural Bank of China Ltd. down 0.3% and Industrial & Commercial Bank of China Ltd. adding 0.2%. Bank of China Ltd. has changed little.
“The recent ruling on financial firms may cause uncertainty as to whether there will be punitive measures to follow such as fines or tighter regulation of lending activities, both of which may appear to offer a cloudy outlook for investors. short-term financial companies, âsaid Jun. Rong Yeap, Market Strategist at IG Asia Pte.
It also comes as authorities crack down on everything from fintech platforms to real estate developers to limit financial risks. Global investors have been pissed off by Beijing’s regulatory assault targeting its largest tech companies and other industries, as well as President Xi Jinping’s pressure to create “common prosperity,” a campaign to narrow the divide. riches.
The inspectors will focus on checking for gaps in the political consciousness of party leaders of organizations and issues that hamper high-quality development of the financial sector, according to a report published last month in the official People’s Daily announcing upcoming inspections. quoting Zhao. Leji, director of CCDI.
In previous inspections, Beijing has sent teams to the education regulator, top universities, local governments, propaganda and cyberspace watchdogs, larger state-owned companies, and other government departments.
The last financial sector inspection dates back to late 2015 when CCDI focused on 21 entities. This check did not include the four bad debt managers. Inspections often lead to the rectification of violations and sometimes to further investigation of suspicious transactions and officials.
Among the offenses identified by the anti-corruption fighter six years ago were the spouses or children of regulators holding foreign passports, relatives of stock exchange staff engaging in insider trading and employees of sovereign wealth funds putting golf outings on expense accounts.
âWith the help of Abhishek Vishnoi and Zhang Dingmin.
Photograph: A man flies a kite over the Bund as the Lujiazui financial district stands in the background in Shanghai, China on Saturday, April 10, 2021. China’s population is aging faster than most developed economies of the world due to decades of family planning aimed at stopping population growth. Photo credit: Qilai Shen / Bloomberg
Copyright 2021 Bloomberg.
Interested in Carriers?
Receive automatic alerts for this topic.