The China Banking Regulatory Commission announced a new crackdown on shadow banking, China Securities Journal reported.
The document, called To Further Regulate the Market Chaos in the Banking Sector, has pointed out key areas of rectification, including using off-balance-sheet funds to directly or indirectly invest in stock markets or real estate programs, such as providing financing for developers to purchase lands.
Other key areas include providing financing for commercial real estate developers with insufficient funds or without qualifications, distributing non-compliant mortgages, and, using comprehensive consumer loans, personal business loans and credit card overdrafts for home purchases.
Chen Haowu, an analyst at the Guangda Securities, expects the crackdown on shadow banking will be continued.
On the one hand, banks may suffer from profit losses in the short term, while in the long run, the financial risk on the banking system will decrease drastically, Chen added.
The reason for these continuously appearing crack downs, is that the Communist regime of China, has built up its trade position on financial corruption and shonky practices.
Bring on the crackdowns, free Chinese trade to trusting and honest ways.
Let the great Chinese people flourish inside China with deomocratic elections, consumer products that they choose to buy and transparent financial practice.
This is the way forward for China.
Do it now, rather than building a grotesque nuclear scenario.