(Yicai Global) Nov. 5 -- The People's Bank of China, the country's central bank, will conduct mock supervision and regulation of five financial holding companies to gain insights into building an oversight and regulatory system, and will release specific policies in next year's first half.

PBOC has selected Hong Kong-headquartered China Merchants Group, Shanghai International Group, Beijing Financial Holdings Group, Ant Financial Services Group under Hangzhou-based Alibaba Group Holding and Suning.Com of Nanjing for the pilot, Zhou Xuedong, director of the General Administration Department and the head of the Financial Stability Bureau at the central bank, said Nov. 2.

China's deepening financial liberalization means more non-financial companies are now investing in and holding an array of financial firms and institutions through setup, merger and acquisition, and equity purchase to form financial holding groups, some of which are ballooning, have an abundance of business forms and correspondingly high risks, but lack needed supervision and regulation, which imperils social and economic stability. 

A corresponding supervisory and regulatory system is thus urgently needed to promote their healthy growth.

The aim of introducing specific policies for supervision and regulation is to effectively rein in the potential risks of these wildly-growing financial holding firms, hold the line against the emergence of systematic financial risks, standardize these companies' development, and fill in gaps in the supervisory and regulatory system, Zhou explained

Editor: Ben Armour