China central bank to play bigger role managing financial risk, says state TV

A man walks past the headquarters of the People's Bank of China (PBOC), the central bank, in Beijing November 20, 2013. — Reuters picA man walks past the headquarters of the People’s Bank of (PBOC), the , in Beijing November 20, 2013. — Reuters picSHANGHAI, July 16 — China’s central bank will take on a beefed up role managing systemic risk in the country’s financial markets, state broadcaster China Central Television said yesterday, citing President Xi Jinping.

Speaking at the National Financial Work Conference, Xi said China would set up a financial stability committee under the State Council, boost the People’s Bank of China’s (PBOC) role managing financial risks and create more cohesive regulation.

“We will strengthen the PBOC’s role in macro-prudential management and in averting systemic risk,” Xi said, adding the country would increase the accountability of regulators and the supervision over regulatory bodies.

Ahead of the closed-door event, economists had widely expected the meeting to focus on how the central bank could better coordinate with the country’s three main financial regulators to manage risk in the financial system.

China’s financial regulators are gathered in Beijing in a once-in-five-years huddle to discuss how better to tackle weakness in the financial system. The most recent meeting in 2012 yielded no significant policy change.

The main regulators include the China Regulatory Commission (CBRC), the China Securities Regulatory Commission and the China Regulatory Commission.

Ahead of a leadership reshuffle in the autumn, Beijing has zeroed in on the stability of the economy and financial system, cracking down on risky behaviour by insurers and lenders, as well as targeting high levels of corporate debt.

Investors have long supported the idea of a unified body to oversee the regulators that oversee the different parts of China’s financial system, though there is little sign that a super-merger of the regulators is imminent.

In 2015, a poorly coordinated response to a crash in China drew scrutiny on the government’s response. Premier Li Keqiang openly criticised the financial regulators as not responding sufficiently.

In March this year, the new CBRC chief Guo Shuqing said the banking regulator was collaborating with other regulators to create a framework to close loopholes in rules for cross-market financial products. — Reuters

Source: The Malay Mail Online

Leave a Reply

Your email address will not be published. Required fields are marked as *

Time limit is exhausted. Please reload CAPTCHA.