China's central bank will tighten1 supervision2 of shadow banking3 by including wealth management products (WMPs) into its risk monitoring system next year.
The People's Bank of China on Monday confirmed media reports that it would add WMPs to its checklist for financial institutions under the macro prudential assessment4
(MPA) framework in the first quarter of 2017.
The MPA currently covers loans and other assets including investment on bonds and equities5
China's fast expanding wealth management industry is considered a source of risk, as off-balance sheet WMPs channel deposits into risky6
investments without enough regulation.
The government will put more emphasis on controlling financial risks in 2017, according to the Central Economic Work Conference, a key economic meeting held last week.