China’s fintech industry needs regulation to avoid risk build-up, central bank says
- While financial technology brings efficiencies, its risks must be closely regulated, warns People’s Bank of China deputy governor Pan Gongsheng
- Government’s deleveraging campaign a costly lesson of what can go wrong if risks not kept in check
China’s central bank has again warned that the country must avoid building up risks in the technology-driven development of its domestic financial sector, given the headwinds of a slowing economy and the continued trade war with the United States.
Pan Gongsheng, deputy governor of the People’s Bank of China (PBOC), said on Tuesday that financial technology (fintech) should be regulated in accordance with the law and in line with policy initiatives intended to prevent financial risks, according to local media.
The interests of investors in low-risk products should be protected, as should citizens’ wallets, Pan is reported to have told the China Internet Finance Forum.
“It is necessary to prevent [financial] technology from being used as a disguise and result in unproductiveness in finance,” Pan said. “Financial activities that interact with the public, even in the name of technology, should be strictly regulated.”
It is necessary to prevent [financial] technology from being used as a disguise and result in unproductiveness in finance. Financial activities that interact with the public, even in the name of technology, should be strictly regulated
Pan stressed that new technologies would help improve the quality and efficiency of the financial sector, so that support would be provided to firms to accept e-commerce finance platforms and supply chains, enriching the financial product system. Technology-driven financial activities should serve people and the real economy, he said.