China launches anti-graft campaign in finance sector by inspecting banking regulator

BEIJING (Reuters) - China’s top anti-graft watchdog has kicked off a roughly two-month inspection of the country’s banking and insurance regulator, as part of a broader campaign to weed out corrupt Communist Party officials in the financial sector.

The Central Commission for Discipline Inspection (CCDI) is deploying teams to 25 financial institutions including the central bank, stock exchanges, banks and asset-management companies, with orders to focus on their Party committees.

A statement issued late on Monday by the China Banking and Insurance Regulatory Commission (CBIRC), the first institution to come under scrutiny, said inspectors will looking for any violation of politicial discipline - a Party euphemism for corruption.

“Finance is the core of the modern economy, and is tied to development and security,” Yang Guozhong, the CCDI official in charge of the inspection, was quoted as saying in the statement.

“Inspections are political supervision, and a powerful and comprehensive means of governing the Party in a strict way,” Yang said.

“There must also be no systemic financial risks - that’s the bottom-line that we must resolutely defend,” he said.

In late September, China’s top anti-graft official Zhao Leji called for in-depth inspection to uncover political deviation at Party organisations, as well as problems that affect the development of the financial sector.

On Monday, the CCDI said the former chairman and Party head at Chang’an Bank, based in the northwestern province of Shaanxi, had been expelled from the Party and public office due to corruption.

Chinese President Xi Jinping is scrutinising the ties that state banks and other financial institutions have developed with big private companies, the Wall Street Journal reported on Monday, citing people with knowledge of the plan.

In recent months, Chinese regulators have taken aim at sectors ranging from technology to education and property, targeting some of the biggest firms in the country like Alibaba Group and Tencent Holdings.