“It’s inappropriate to have local regulators supervise such businesses,” he said, recommending that regulators take a differentiated supervisory approach when granting licenses to online microlenders.
That gives rise to contradiction and potential conflict, he said. Such lenders are supervised by local financial authorities where they are registered, but they often operate across administrative boundaries. But Xiao said the current rules aren’t suitable to foster the industry. Small loans granted by licensed online lenders, especially to individuals, are an important part of government strategy to boost consumption and promote inclusive finance. At a meeting on the sidelines of the “Two Sessions” on Thursday, Xiao, who is a member of the Chinese People’s Political Consultative Conference (CPPCC), highlighted problems in the regulatory setup covering online microlenders. Xiao Gang may have retired as head of the securities regulator, but his roles as a former Bank of China head and ex-central bank deputy governor make him someone worth paying attention to.
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