Two people chat outside the headquarters of the China Banking and Insurance Regulatory Commission on April 8. Photo: IC

China's top finance regulator vowed on Wednesday to enhance compliance work among banks nationwide in order to prevent illegal capital flows from banks to the real estate sector. Analysts said the regulation campaign is aimed at curbing risks following the problems experienced by real estate developer China Evergrande.
 
The China Banking and Insurance Regulatory Commission released an announcement on its official website for all finance regulators, state-owned banks, joint-stock banks and foreign invested banks, in order to enhance compliance.
 
The announcement mentioned multiple flaws in the current Chinese banking system, including illegal capital flows to the real estate sector, false financial index reporting and hidden debts for local governments.
 
The regulator said 9,579 financial firms in China have been fined since the campaign started in 2017, with penalties of 10.436 billion yuan ($1.63 billion) handed out so far. The commission will cooperate with multiple financial departments to further enhance regulation.

Global Times