Chief of China's banking regulator Shang Fulin has said his organization will take measures to prevent shadow banking risks from spreading to the banking system.
As banks' burgeoning financial product businesses grow rapidly in China, it is inevitable that problems and risks will emerge, said Shang, chairman of the China Banking Regulatory Commission (CBRC), on the sidelines of the first session of the 12th National People's Congress, the country's parliament.
The CBRC, together with commercial banks, is considering strictly supervising the design, sale and capital flow of financial products, he said.
Banks will be banned from selling products without authorization and selling private equity fund products. They will also be banned from misleading consumers to buy their financial products, according to Shang.
The senior official said China's trust business and banking financial services do not belong to the shadow banking system (SBS) as defined internationally and most of the businesses are currently under supervision.
Meanwhile, Shang said the regulatory body is concerned about shadow banking risks and will take measures to prevent the potential dangers of shadow banking and private financing from spreading to the banking system.
The SBS is the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks.
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