China’s $40 Trillion Man Has the Toughest Job in Global Finance
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China’s $40 Trillion Man Has the Toughest Job in Global Finance

As banking regulator, Guo Shuqing is tasked with eliminating excess risks without stifling growth.

Bloomberg Markets
Bloomberg, 2019
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In 2017, people were amazed when China’s top bank regulator, Guo Shuqing, announced that he would resign if he couldn’t stem the excesses in China’s massive banking system. This accountability just isn’t the sort of thing that prominent Chinese government officials routinely accept. But as the leader of the $40 trillion complex that comprises China’s markets and financial institutions, Guo is faced with a titanic task, especially at a time of economic uncertainty and political unrest. This informative article from Bloomberg sheds light on the world’s largest, and least known, financial system.

Summary

China’s chief bank regulator has pledged to cut the surfeit of government backstops on savings and investments.

Guo Shuqing understands that the stakes are high in navigating a banking system twice as large as that of the United States. Guo needs to make “financial risk and return go hand in hand.” Reaching that goal means creating new rules by which the government will no longer bail out all lenders and investors when transactions go wrong. And he needs to dispel people’s doubts about that, while dealing with a trade war and excessive debt that imperils China’s $13 trillion economy.

As of late 2019, Guo had eliminated guarantees...

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