Ant Financial’s business card may be for this reason | TechNews

Although Ant Financial’s fundraising is backed by the world’s leading banks and investment funds, this time the CCP government decided to overwhelm Jack Ma’s dissatisfaction with oversight. From a regulatory perspective, it’s actually a big deal if Ant Financial goes public.

At present, the Chinese media basically believe that this is due to Jack Ma’s recent disobedience to supervision and raised the nerves of the high level. This may not just be an instruction from the supervisory unit, but an instruction from the central government. There have been many articles that debate the thinking of Jack Ma. It is believed to be the handwriting of an official. The good news is that the announcement refers to the suspension of the listing, not the suspension of the listing. There seems to be room for a change of course, but there is no need to be overly optimistic. The current cases of suspension of listing in China have not produced good results.

From a regulatory perspective, Ant Financial may be facing doubt that its online microfinance business is too big, and China is concerned that this could cause systemic risks, although Jack Ma claims that China has no systemic risks. However, in the face of the epidemic, the probability of default on these loans will increase dramatically and the risks are too great to ignore. According to statistics, in the first half of this year alone, Ant’s total external loans reached nearly 1.7 trillion RMB, which is equivalent to a quarter of the short-term consumer credit of all Chinese financial institutions, which which is very impressive.

However, Jack Ma insisted that Ant Financial is not a financial institution and it would be strange if the government were not concerned. Normally, after being interviewed, Jack Ma should express his obedience to national supervision. On the eve of listing, it is unreasonable to insist that Ant Financial not enter financial supervision, especially Jack Ma has publicly declared his membership in the party. Therefore, the public opinion believes that after being interviewed, Jack Ma should have softened and therefore remain suspended, which surprised the market.

This casts a shadow on Ant Financial and also prompts the market to reassess the regulatory risks of China’s financial industry. However, as Jack Ma said, innovation requires a price, but the CCP may not be willing to pay it yet. Its huge ambitions can overwhelm small and medium-sized local banks. In particular, listing will be a very important turning point. Ant Financial is gone. The path to asset securitization has increased the leverage of the original loan hundreds of times, and will disrupt the original financial order after listing.

This is not what regulators would like to see, but as a whole, Ant Financial may continue on the list, but some companies must dismantle and separate to reassure the government. Of course, it is difficult to say whether the dismantled Ant Financial still has such market value. His assessment was originally controversial. There are also opinions that it was originally a scam that involved domestic and foreign investment.

(Source of the first image: Ant Financial)

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