Senior officials urge fixing excess financial innovations

BEIJING - China should resolve to reorganize redundant financial innovations that do no good for the sector's development and the real economy, senior officials from the country's financial regulators have said.

Some financial inter-bank business and investment services should be rectified for the healthy growth of the country's finance, Liu Shiyu, deputy governor of the People's Bank of China, said at a forum held in Beijing that ended on Sunday.

"Some of the financial innovations nowadays are actually avoidance of regulation," Liu said. "They don't contribute to China's adjustment of financial structure or improve productivity."

His words were echoed by Wang Zhaoxing, vice chairman of China Banking Regulatory Commission, who opposed emerging financial services that complicate the sector and lack transparency.

Those kinds of innovations, which are beyond proper monitoring, have done no good for the real economy and will lead to the collapse of China's financial sector, Wang said.

Their remarks, though mentioning no specific target, were thought to be aimed at the country's burgeoning Internet fund products led by Yu'ebao, which has drawn millions of investors away from banks and squeezed their profitability. The products stirred debate over their legality in the beginning of the year.

In addition, Liu said China should guide the financial innovations to the bond field and build a multi-tier capital market for sustainable development.

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