China’s anti-graft watchdog announced on May 19 that Sun Guofeng, former director of the Monetary Policy Department of the People’s Bank of China, was arrested. He was suspected of serious violation of laws and discipline.
According to Wall Street Journal, a source familiar with the matter said the investigation would focus on whether the POBC senior official had leaked confidential information for personal gains.
The source also disclosed that China’s corruption watchdog CCDI received allegations of the former director of sexual harassment last year.
Chinese media Caixin reported that Sun’s wife was investigated too. She’s been working at China Central Depository & Clearing Co.
As the Wall Street Journal reported, Sun Guofeng had tried very hard to maintain central bank policy discipline.
People close to the POBC official said that he thought the credit easing policy would only fuel speculative bubbles. This approach could also lead to excessive capital outflows during China’s slow economic growth. On the contrary, China’s leadership was looking for effective measures to prevent the economy from crashing.
The news outlet cites Cornell University’s economic professor Eswar Prasad, saying the Chinese central bank’s policy room for maneuver is increasingly limited. China has been captured between the vicious cycle of currency depreciation and capital outflows.
Dozens of financial officials are in trouble under the so-called anti-corruption campaign.
According to the SCMP, 17 officials in the financial sector were investigated or punished in April alone. That included Tian Huiyu, former president of China Merchants Bank.