Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Jack Ma urges financial regulation reform on eve of Ant Group IPO

Jack Ma urges financial regulation reform on eve of Ant Group IPO

Jack Ma urges financial regulation reform on eve of Ant Group’s ‘biggest IPO in history’

Jack Ma, the Chinese billionaire behind Alibaba and Ant Group, has questioned whether international financial regulations are suitable for the Chinese economy and suggested traditional banks should change their “pawnshop” operating model.

Ma, who has retired from all his corporate roles but remains the face of Alibaba and Ant, told a financial forum in Shanghai that Beijing’s emphasis on “preventing systemic financial risks” may have missed the point, while the existing regulatory framework, known as the Basel Accords, may not be the right “medicine” for China’s financial sector.

Ma was speaking hours after the pricing for Ant Group’s initial public offering in Hong Kong and Shanghai – billed as the “biggest in history” – was determined.

He said the share price had been decided on Friday but did not disclose the figure.

However, the South China Morning Post, which is owned by Alibaba, has previously reported that the size of the IPO could be between US$35 billion and US$45 billion.

Ma told the Bund Summit, an event attended by hundreds of bankers and regulators in Shanghai, that the Ant Group offering was a “miracle” because it was the first time a big tech company had set prices outside New York.

He said: “We didn’t dare to think about it five years ago, or even three years ago. But the miracle just happened.”

He also questioned whether traditional financial regulations are in need of an overhaul.

Ma said the Basel Accords, which use a labyrinth of indicators to control risk and are used by regulators worldwide, had been designed by “a club of old people” and questioned whether China needed to follow them religiously.

He argued that China’s biggest problem was the lack of a functioning financial system and compared them to giving a patient the wrong medicine.

“The symptoms of Alzheimer’s and polio may look similar, but they are two completely different diseases. If a child takes Alzheimer’s medicine to cure polio, there will be many new problems,” Ma said.

“The Basel Accords are intended to treat diseases of an ageing banking system, it is a medicine for old people … but China’s financial system is still in its youth.”


Ant Group’s IPO was described as a “miracle”.


Ma said China’s financial system is still dominated by big state banks, and it is in need of other technology-driven channels to provide funds efficiently in a vast economic system.

“Big banks are like big rivers … but we need ponds, creeks and small channels in the system. Without these in an ecosystem, floods and droughts will always happen here and there,” he said.

Ma said conventional banking businesses in China were run like “pawn shops” as banks always demand sufficient collateral to make loans. But in the future, lending decisions should be decided by big data and credit records.

He said the mainstream banking system had been designed for an age of industrial development, but in future it would need an inclusive, sustainable and green system that used new technologies such as big data, cloud computing as well as blockchain.

“Innovation always comes with a risk, there will be no risk-free innovation … the biggest risk is that you try to minimise the risk to zero,” Ma said.

He also said there was too much red tape involved in Chinese financial regulation.

“Good innovations are not afraid of supervision, but they do fear outdated supervision. We cannot manage an airport in the same way as we manage a railway station. We cannot manage the future with the same old approach of yesterday,” Ma said. “Today the world, especially China, needs a lot of policy experts, but not experts in red-tape.”


Alipay and other financial services offered by Ant Group have been hit with traditional regulatory requirements, such as licensing and capital adequacy requirements, and the way financial regulations evolve will be a major factor in determining its future.

Ma said Ant Group has been trying to promote “green, sustainable and inclusive finance” over the last 16 years.

“If you see green, sustainable and inclusive finance as a mistake, we are willing to make that mistake again and again,” he added.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
×