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China halted Ant Group’s blockbuster IPO to avoid ‘systemic risks,’ says former finance minister

蘋果日報 2020/12/20 19:39


The abrupt suspension of Ant Group’s IPO last month was aimed at pre-empting systemic risks in China’s financial market, according to a former Chinese finance minister.
Without directly naming Ant Group, Lou Jiwei, now the director of the Chinese People’s Political Consultative Conference’s foreign affairs committee, told a forum on Sunday that China needed to prevent a “winner-takes-all” and “too-big-to-fail” situation in fintech.
Fintech giants helped banks by providing borrowers’ data so the moneylenders could assess loan risks, but their operations also created risks, Lou said during the China Wealth Management 50 Forum.
“Errors in the data and risk assessment models provided by a single fintech platform who has an overly large market share can lead to a large amount of bad loans,” Lou said, referring to one unnamed platform which has partnered with dozens of banks and issued several trillion yuan of loans.
Lou suggested restricting the number of banks that fintech platforms can partner with, to around 10 to 15, so no single platform could dominate the market. “Let multiple platforms operate to form competition. Ant Group can join. JD can join. All will be subject to the same monitoring. This can strike a balance between efficiency and risk,” he said.
China needs to continue regulating its financial sector as any turmoil could do enormous harm to its domestic market, Lou said. The country should also adhere to deleveraging to stabilize its market amid volatility in foreign markets, he said.
JD.com’s finance unit, JD Digits, on Sunday stopped offering its online savings service on its app due to concerns by regulatory departments, the Beijing-based e-commerce giant said.
China’s regulators suspended Alibaba’s planned listing of its Ant Group in November, which was tipped to be the world’s biggest IPO.
The central bank’s financial stability director Sun Tianqi said last month that the country’s risk management and regulatory framework had to catch up with the emergence of online deposit products.
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