China's outgoing central bank chief has said that more robust controls on financial sector risk are needed and are under development.
Speaking to reporters on the sidelines of the National People's Congress session in Beijing, People's Bank of China Governor Zhou Xiaochuan warned of potential risks involving financial holding companies and financial technology companies that have gotten involved in lending.
He said that while regulators had made significant progress in improving risk control mechanisms in recent years, more controls are needed to prevent and uncover fraud, including at non-bank institutions, according to the Nikkei Asian Review.
"The moves are meant to determine the authenticity and quality of [financial companies'] capital and to ensure capital adequacy," Mr Zhou said.
Deputy Governor Pan Gongsheng said at the same press conference that new regulations would strengthen board governance at financial holding companies and their subsidiaries.
Separately, Premier Li Keqiang last week warned of a "serious crackdown" on financial fraud and promised to tighten risk controls over providers of financial services including online payments. China is a leader in mobile payments, with their popularity approaching that of cash.
Financial regulators have been scrutinising companies over possible suspicious and fraudulent transactions, especially in relation to overseas asset purchases.
Last month, the regulators took control of Anbang Insurance Group, one of the companies most active in foreign mergers and acquisitions, and disclosed that its chairman is being prosecuted for fraudulent fundraising and embezzlement. The CIRC said it had discovered illegal operations at the insurer and had found a serious risk of insolvency.
Mr Zhou reiterated the government's policy shift away from fast-paced economic growth to put more attention on structural reforms. Beijing is targeting 6.5% growth in 2018, suggesting a slowdown compared to the 6.9% rate recorded in 2017.
"We now emphasise the 'new normal' of the economy, shifting from the past growth model of quantitative growth... referring to the accumulation of capital and investment to boost economic growth," Mr Zhou said.
Mr Zhou is due to retire at the end of the month after 15 years heading the central bank.