China’s banking and insurance regulator issued draft rules on Friday in which emphasized stronger Communist Party leadership in both state-owned and private banks and insurers to contain corporate governance risks.
The draft rules urged state-owned banking and insurance institutions to prioritize the key business decisions made by the Communist Party committee before consulting the board and the top leadership, according to statements of the China’s Banking and Insurance Regulatory Commission (CBIRC).
It also limited the number of financial institutions one single individual can be appointed to as the independent director in order to restrain interest transfers. It also urged all lenders and insurers to shoulder responsibilities in environmental, social and corporate governance, a relatively new concept to Chinese financial institutions.
Chinese financial regulators have been sharpening their scrutiny of financial institutions’ shareholdings amid fears that loans or funds from lenders and insurers to big investors could prove a weak point in the country’s financial system.
(Reporting by Cheng Leng, Zhang Yan and Ryan Woo; editing by Jon Boyle)
Topics Carriers Leadership China
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