Peer-to-peer (P2P) lending platforms, third-party online payment, crowdfunding, and other internet-based financial services in China might soon be included in the macro prudential assessment (MPA) framework.
The People's Bank of China (PBOC) will explore methods to include large internet financial businesses in the MPA, Xinhua Net reported on Saturday (5 August 2017).
The MPA is China's mechanism to assess the systemic risk of financial institutions in the country. The framework already include banks, brokerages, and insurers who were regarded as "systemically important".
According to PBOC, the plan to include internet-based financial services in MPA is to prevent cyclical risks and cross-market risk transmission.
The development of internet finance in the country has spurred financial reach, improved financial services' efficiency, and helped small business gains loans, said Xinhua Net.
The PBOC will improve its supervision and regulation of internet financial businesses, allow industry and local associations to participate in supervision, and promote new technology to combat the risks.
"The PBOC move...is actually a good sign for the fintech market because regulation indicates recognition of importance, and MPA, a mid-to long-term regulation framework, indicates that short-term risks are well handled," said Xue Hongyan, director of the Suning Financial Research Institute, in a news posted by the State Council of China.