Embattled Beijing takes aim at underground banking

China has launched a three-month nationwide campaign against underground banks to crack down on money laundering and stem illegal capital flows in and out of the country.

China has launched a three-month nationwide campaign against underground banks to crack down on money laundering and stem illegal capital flows in and out of the country.

The campaign will focus on illicit fund transfers and money-laundering connected to corrupt officials and terrorists, the Ministry of Public Security said on its website on Monday. The crackdown, with immediate effect, will last until the end of November and is being instigated in the wake of the country's stock market turmoil.

Vice minister of public security Meng Qingfeng said in the announcement that underground banking activities had contributed to the disorder of the country’s financial markets. Meng...

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