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China Central Bank turning to big data for financial supervision

(Bloomberg) -- China’s central bank said it created a new unit to address emerging financial security challenges brought by technological innovations.

The People’s Bank of China set up a committee to improve financial technology research and coordination and will study how it affects monetary policy, markets, financial stability, payments and clearance, according to a statement released Monday.

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Members of China's People's Liberation Army (PLA) walk past the People's Bank Of China (PBOC) headquarters in the financial district of Beijing, China, on Wednesday, Dec. 2, 2015. China's great rebalancing -- the long-sought shift away from investment and manufacturing towards consumption and services -- is one of the nation's big themes of the year. One problem: the rebalancing stops at the water's edge. Photographer: Qilai Shen/Bloomberg

Technology-driven financial innovation has injected vitality into financial development and brought new security challenges, the PBOC said in the statement. The central bank will step up use of measures such as big data, artificial intelligence and cloud computing to increase its capability to recognize, prevent and reduce cross-sector and cross-market financial risks.

China’s regulators have generally steered clear of financial technology innovations, which have spawned success stories such as Jack Ma’s Ant Financial but have also led to problems such as online lending fraud. Authorities have tightened supervision this year, imposing limits on peer-to-peer platforms to curb risks in some shadow-banking sectors.

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