China to Tighten up Oversight of Financial Holding Companies

August 09, 2019 | BY

Marilyn Romero

New draft measures proposed by China’s central bank will mean some non-financial firms will be classified as financial holding companies and will require a license to operate.

PBOC

The People’s Bank of China, or PBOC, has recently released draft measures to tighten its oversight of financial holding companies as part of efforts to prevent risks to the financial sector. In a statement on its website, the PBOC said it noted how numerous non-financial companies have engaged in a “blind expansion” into the financial sector, leading to mounting risks.

“Some financial holding companies, mainly those owned or controlled by non-financial enterprises, have been expanding into the financial sector blindly, which has led to a regulatory vacuum and risk accumulation,” the central bank said.

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