What’s New: China’s banking and insurance regulators are stepping up scrutiny of companies’ borrowing activities to contain violations and financial risks, regulatory officials in Beijing, Guangdong and Zhejiang said Thursday at a joint press conference.
Regulators will tighten oversight of credit flows to prevent companies from taking advantage of easing policies designed to support businesses amid the pandemic, said Li Mingxiao, director of Beijing’s municipal banking and insurance regulatory bureau.
Regulators have detected companies using bank loans obtained under supportive policies to make illegal investments in wealth management products, stocks and property markets for speculative gains, Li said.
Background: Financial regulators raised the alarm as China stepped up easing policies and pumped more liquidity into the market to bolster the virus-hit economy. The remarks were made at the first press conference held by the China Banking and Insurance Regulatory Commission (CBIRC) since the Covid-19 outbreak.
Chinese regulators have launched a series of measures to make it easier for small and micro businesses to obtain credit to help them recover from the pandemic. The CBIRC said Wednesday that more than 40% of loans to the country’s small and midsize enterprises have benefited from supportive measures including refinancing and extensions on loan repayments.
Related: Central Bank Boosts Financing for Coronavirus-Hit Businesses
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
