China to tighten regulations over local financial institutions

BEIJING -- A meeting Thursday urged China's financial regulators to improve regulations of local financial institutions to mitigate risks.

Local financial institutions have maintained overall healthy development and played a vital role in serving small and medium-sized enterprises, according to a meeting of the financial stability and development committee under the State Council.

Vice-Premier Liu He, who is also a member of the Political Bureau of the Communist Party of China Central Committee and head of the financial stability and development committee, presided over the meeting.

According to the meeting, local financial institutions should focus on their core businesses and prioritize services for local SMEs and residents.

While encouraging mergers between well-performing institutions and high-risk ones, the meeting urged regulators to intensify inspections over shareholders, transactions, and data authenticity.

Local financial institutions should enhance risk management, conduct prudent operations, and avoid excessive expansions.

The meeting also called for efforts to improve the local financial environment and unleash local financial institutions' potential for innovation.