Editorial: Financial Regulation, Innovation Can Go Hand in Hand

After 16 years of hesitation, China is finally putting into place strengthened supervision of financial holding companies. The central bank is leading a pilot program to test supervision measures, and the relevant regulations are expected to be introduced by the end of this year. This will be a major turning point for financial supervision and for financial markets. It has long been clear to the market that financial holding companies can present enormous risk. This risk is often intertwined with risks from “shadow banking,” asset management and internet finance, and could have disastrous consequences if supervision is not imposed as soon as possible.

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