Many Chinese commercial banks have set up asset management subsidiaries to create a transformation in their money management business, the Shanghai Securities News reported on Tuesday.
The move is driven by China's new regulations which aim at preventing financial risks, according to the report.
The commercial banks referred to include the China Merchants Bank, the Hua Xia Bank, the Bank of Beijing, the Bank of Ningbo, the Bank of Communications, the China Everbright Bank, the Ping An Bank, the Bank of Nanjing and the China Minsheng Bank among others.
Li Lijie, vice manager of the asset management business center of the China Construction Bank, said that subsidiaries were more flexible in providing market mechanisms. Thus, more diversified products are expected to be created as a result.
However, challenges and more pressure might come along with opportunities, as Li put it.
"On the one hand, once the asset management business is separated from its parent bank, its collaboration with other businesses of the bank will be weakened," said Li.
Regarding risk prevention, Li held that although it was helpful to separate related risks from the parent bank, it would take quite a long time for the subsidiaries to set up an independent mechanism for risk control and decision making.
Another challenge for the newly set-up subsidiaries by commercial banks is the competition from other asset management institutions.
Wei Qing, a vice manager on asset management from the China Merchants Bank, said that they had a long way to go when compared with other mature asset management institutions.
The move is driven by China's new regulations which aim at preventing financial risks, according to the report.
The commercial banks referred to include the China Merchants Bank, the Hua Xia Bank, the Bank of Beijing, the Bank of Ningbo, the Bank of Communications, the China Everbright Bank, the Ping An Bank, the Bank of Nanjing and the China Minsheng Bank among others.
Li Lijie, vice manager of the asset management business center of the China Construction Bank, said that subsidiaries were more flexible in providing market mechanisms. Thus, more diversified products are expected to be created as a result.
However, challenges and more pressure might come along with opportunities, as Li put it.
"On the one hand, once the asset management business is separated from its parent bank, its collaboration with other businesses of the bank will be weakened," said Li.
Regarding risk prevention, Li held that although it was helpful to separate related risks from the parent bank, it would take quite a long time for the subsidiaries to set up an independent mechanism for risk control and decision making.
Another challenge for the newly set-up subsidiaries by commercial banks is the competition from other asset management institutions.
Wei Qing, a vice manager on asset management from the China Merchants Bank, said that they had a long way to go when compared with other mature asset management institutions.
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