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在线翻译:
szdaily -> Business -> 
Regulator steps up scrutiny of financial firms
    2018-05-08  08:53    Shenzhen Daily

THE country’s financial regulator stepped up its crackdown on industry malpractice, imposing a total 183 million yuan (US$29 million) in fines on three institutions for transgressions including lax lending practices and understating of risky assets.

The China Banking and Insurance Regulatory Commission imposed the latest penalties on China Merchants Bank Co., Industrial Bank Co. and Shanghai Pudong Development Co. for more than a dozen violations at each entity, the regulator said.

They represent the largest fines since China reshuffled its financial supervisory regime in March by combining the banking and insurance regulators under Guo Shuqing, who had helmed the banking regulator for about a year prior to the merger. Guo has vowed to keep “fighting the battle” to defuse risks and root out malpractice in the US$43 trillion financial industry.

Unlike his predecessors who tended to rely on internal reprimands, Guo has imposed stiff penalties on offenders, fired their executives and disclosed details of the violations.

More than 2.9 billion yuan of penalties and confiscations of funds were imposed on 1,877 financial institutions in 2017, a 10-fold surge from the previous year. Some 270 banking executives were punished, including some who were banned from the industry for life.

The punishment comes as China’s regulators toughen their stance on market irregularities, targeting risky business such as shadow banking.

Last month, the central bank tightened regulations on asset management businesses of financial institutions.

The new rules unify regulatory standards for asset management products and address issues such as implicit guarantees by banks on many wealth management products.

While the new rules give financial institutions until the end of 2020 to fully reform their practices, risks in existing business may be gradually exposed, and more fines could be imposed, analysts said.

Greater regulatory scrutiny could cut into banks’ profitability by limiting their business opportunities, forcing them to bring more loans back onto their balance sheets and weakening their capital strength, Fitch Ratings warned in January.

The cost of more stringent risk management and compliance is likely to be more significant than the fines themselves, according to the ratings company.

The China Banking and Insurance Regulatory Commission also issued rules Friday to help limit banks’ exposure to large, single clients, as part of the clampdown on risks in the financial system.

Commercial banks’ outstanding loans to a single client cannot exceed 10 percent of their net capital, it said.

The new rules will take effect from July 1, it added.

The regulator said Friday it has banned companies and individuals from setting up private lending businesses without regulatory approval.

China will crack down on several illegal financial practices including illegal fundraising related to private lending, the regulator said.(SD-Agencies)

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