China Takes Step Against Securitization, Consumer Borrowing With Suspension of Ant IPO — Yves Smith

 Even though China’s financial system is not terribly transparent, and English language reporting on China’s politics should be taken with a fistful of salt, regulators stomped on a globally high-profile company widely deemed to be one of China’s stars to send a message. And even from the other side of the world, mediated through the Anglo press, the message seems very clear: China is going to leash and collar businesses, whether banks or fintech players, that profit by giving consumers high interest rate loans and rely on securitization to shift the risk of loss on to other parties....

Like the US should have done prior to the GFC and certainly in the aftermath.

It seems that Jack Ma was using the US model of fintech versus banking, and the Chinese regulators said, no way.

The idea that regulators woke up a few days before the Ant IPO and blindsided the company with unexpected rules isn’t remotely credible. Yet the press is parroting Ant’s and disappointed brokers’ spin. The reality is that regulators signaled their requirements months ago (the Chinese appear to be less explicit in their public remarks than Western regulators typically are) and without a doubt informed Ant and any similarly-situated concerns of their requirements. Ma apparently thought he could defy the Chinese government. He’s learned otherwise....

It’s refreshing to see a government that isn’t afraid to slap down a rich businessman, even a high profile billionaire, who thinks he can call the shots. Sadly, the importance of political donations means that sort of thing is distant history in the US.

Naked Capitalism
China Takes Step Against Securitization, Consumer Borrowing With Suspension of Ant IPO
Yves Smith