Since a campaign to regulate and supervise online financing was launched by the State Council in late April, related government agencies have tightened their grip on online payments, online loans, crowdfunding and Internet-based insurance brokers, according to a report by online journal The Paper.
The China Internet Banking Association, which operates under the jurisdiction of the People’s Bank of China, was officially established on March 25 to strengthen regulation and impose “self-discipline” on the online banking sector.
In traditional finance, too, government regulators have also tightened their grip, trying to guide capital back into the real economy after billions have already flowed offshore.
Insiders have stated that a high leverage ratio will bring about increasing uncertainty, in turn risking a system-wide financial crisis and negative growth rates, with the general public likely to pay the steepest price.
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