Web sharing hits raw nerve for officials
Fallout from rumour over bank goes all the way to the top as regulator targets Weibo and other mainland social media for tighter supervision
The rapidly rising influence of social media on the mainland is attracting close attention from professional investors and financial regulators concerned about its impact on the markets.
The China Securities Regulatory Commission announced on June 21 tighter supervision of market-sensitive information shared using social media platforms, in particular Weibo, the mainland's largest microblogging service.
The CSRC's statement came a day after rumours spread online about Bank of China facing insolvency, which triggered the worst turmoil in the interbank money market in decades.
A rumour about a shortage of cash at the Big Four bank to complete a payment on time was first reported by the Chinese-language 21st Century Business Herald on its website and through its official Weibo account, which has more than 1.8 million subscribers.
The newspaper is considered one of the mainland's most outspoken and pro-reform financial media outlets.
Within few minutes, its 140-word Weibo message about BOC's cash crunch was reposted by subscribers and other media Weibo accounts thousands of times. But within 24 hours, BOC denied the rumour, and the newspaper published a formal apology to the state-owned commercial bank and its readers.