Central Bank Says China Has Paid “Huge Price” for Online Financial Risk
The Chinese central bank says it will maintain strict regulation of the fintech sector due to concerns over risk in relation to internet finance.
Pan Gongsheng (潘功胜), deputy governor of the People’s Bank of China (PBOC), said that problems with online financial risk in China had provided a “deep lesson” for regulators.
“We have paid a huge price, from the accumulation, expansion and explosion of internet financial risk, to subsequent clean-up and rectification which continues until now,” said Pan in a speech delivered on 17 December at the 3rd Chinese Internet Finance Forum (第三届中国互联网金融论坛) convened in Beijing.
Chinese regulators cracked down on the problem-fraught P2P lending sector in 2019, leading to a plunge in the number of regularly operating platforms from over 7,000 at their peak to under 600 by October this year.
Pan said that the next step will be for authorities to abide by several key principles when it comes to fintech regulation, including:
- Maintaining the fundamental goal of servicing the real economy.
- Upholding the “fundamental baseline” of financial risk prevention.
- Developing financial services that are invigorated by technology.
- Developing regtech and raising the effectiveness of financial regulation.