Sup­port for new Chi­nese bank­ing over­sight body

The Star Early Edition - - INTERNATIONAL - Xin­hua

TEN DAYS af­ter China de­cided to set up a new fi­nan­cial over­sight body, reg­u­la­tors and in­dus­try sources have ex­pressed sup­port for the move to strengthen reg­u­la­tion.

The quin­quen­nial na­tional fi­nan­cial work conference, which ended on July 15, has de­cided a new fi­nan­cial sta­bil­ity and de­vel­op­ment com­mit­tee will be set up un­der the State Coun­cil, with the cen­tral bank tak­ing on a big­ger role in man­ag­ing fi­nan­cial-mar­ket risk.

As China grap­ples with mul­ti­ple risks stem­ming from mis­al­lo­cated in­vest­ment and shadow bank­ing, de­ci­sion mak­ers are count­ing on tighter reg­u­la­tion to root out sys­temic risk in the fi­nan­cial sec­tor. The com­mit­tee’s of­fice will be based at Peo­ple’s Bank of China (PBoC), the cen­tral bank, a PBoC of­fi­cial said.

The com­mit­tee’s re­spon­si­bil­i­ties in­clude for­mu­lat­ing de­vel­op­ment and re­form plans for the fi­nan­cial sec­tor, co-or­di­nat­ing fi­nan­cial poli­cies, en­sur­ing regulatory co­he­sion, for­mu­lat­ing rules to fill regulatory gaps, and hold­ing reg­u­la­tors ac­count­able when su­per­vi­sion is lack­ing, ac­cord­ing to the of­fi­cial.

“Macro pru­den­tial man­age­ment, cou­pled with pru­dent monetary pol­icy will fun­da­men­tally en­sure the real econ­omy ac­cess to fi­nan­cial sup­port and a sta­ble run of the fi­nan­cial sec­tor,” the of­fi­cial said.

To this aim, China should unswerv­ingly carry out pru­dent monetary pol­icy, im­prove risk mon­i­tor­ing and early warn­ing sys­tems and shore up weak links in su­per­vi­sion, the of­fi­cial said. Mean­while, com­pre­hen­sive co-or­di­na­tion should be strength­ened, cor­po­rate gov­er­nance be pushed in fi­nan­cial in­sti­tu­tions and fi­nan­cial re­forms deep­ened.

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