The People's Bank of China (PBOC) warns over high leverage and complex financing methods of financial holding companies, saying their "barbaric" expansion poses systemic risks and will test new rules on five companies of the type including Ant Financial, in its annual China Financial Stability Report.
Financial holdings companies, referring to those formed by non-financial companies taking control of two or more types of financial institutions, according to the central bank. In addition to those set up by state-owned enterprises, financial holding companies include those formed by internet companies such as Alibaba, Tencent, Suning.com, and JD as well as those set up by traditional companies such as HNA Group, Fosun International, China Merchants Group, etc.
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