Chinese fintechs may be regulated like banks: PBOC
The People's Bank of China (PBOC) is set to begin regulating fintech firms in the same way it regulates legacy banks. Bank officials have noted fintech firms have faced more lenient regulations in order to encourage innovation and add more diversity to the Chinese financial system. The PBOC now notes, however, that certain risks have flown under the radar and a new treatment of fintech firms may be in order.  
Fintech companies should fall under the same risk assessment framework as banks, a PBOC official said. Back in August, the PBOC for the first time said it wanted to include internet finance companies in its Macro Prudential Assessment framework, a risk monitoring and mitigation system designated for banks. It remains unknown whether or when that will happen, according to Caixin. “Systemically important financial institutions do not necessarily have to be traditional financial institutions,” Sun Guofeng, head of the PBOC’s finance research institute, said during a recent digital finance conference. Regulators have been “exercising tolerance” toward fintech firms to encourage innovation and improve the financial system’s competitiveness, Sun said. China’s financial system is dominated by banks, so increasing sources of competition can make the entire system more efficient, but at the same time many risks were exposed and left unattended. The actions of some large fintech firms could have an impact on the health of the entire financial system, he added.

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