Trivium

Promoted to his second vice-ministerial position at the age of 48, Li has all the hallmarks of a rising star in China’s financial system. There is speculation that Li’s appointment is a prelude to him taking a top job at the International Monetary Fund (IMF) …

Rules on foreign ownership of securities businesses were eased in 2020, after which several foreign lenders,including JPMorgan Chase & Co.; Goldman Sachs Group Inc.; and Credit Suisse Group AG, gained approval from regulators to take majority ownership of their securities joint ventures. Most are now seeking to increase their stakes further, with some aiming for 100% ownership …

In the early 2000s, as China cracked open the door to its financial services sector, a few foreign banks took the plunge and bought big stakes in Chinese city and rural commercial banks. But those forays didn’t work out well as the foreign banks struggled to influence the local management and were frustrated by cultural differences …

Yi’s wide-ranging speech gives us good insight into what’s on the mind of stock market regulators – and there’s plenty to keep them occupied. Yi isn’t the first regulator to publicly express concern about the potentially destabilizing impact of hot money on China’s capital markets – on March 2, banking regulator Guo Shuqing warned that the aggressive stimulus policies undertaken by many developed countries were fueling asset bubbles that could spill over into China’s financial markets …

The new rules are consistent with other regulatory efforts to improve oversight of bank funding as part of a broader campaign to de-risk the financial system. Still, the new measures will not cause a big headache for most banks, although some smaller lenders that rely on regulatory workarounds to meet their funding needs might struggle in the short term …