A new national financial regulatory administration due to be established according to the newly unveiled institutional reform of the State Council, China's Cabinet, will not only strengthen and upgrade China's current banking and insurance supervision, but also provide a wider systematic space for unified and broader financial supervision in the future.
China's financial sector was rebuilt in the 1980s, with mixed operations and unified supervision by the People's Bank of China, the central bank, in the early days. In the following decades, different regulatory departments were set up, each exercising separate regulations on respective business. With the development of financial mixed business, a kind of mixed supervision, or integrated supervision has reemerged in recent years.
In 2017, the Financial Stability and Development Committee of the State Council was set up for the coordination of monetary policy and financial regulation, and the coordination of financial, fiscal and industrial policies.
The proposed financial regulatory administration will be responsible for the broad financial supervision exclusive of the securities sector, coordinating the protection of the rights and interests of financial consumers, strengthening risk management, prevention and disposal, and investigating and dealing with violations of laws and regulations in accordance with the law. This means that banking, insurance, trusts and other financial business are all subject to the supervision of the new body, marking a step toward the formation of a cross-industry financial regulation landscape in China.
In recent years, the Chinese government has vigorously promoted new rules on asset management, reduced the high-risk "shadow banking" business, cracked down on the sprawling development of internet-based financial business, and promoted the rectification of the financial activities of large platform enterprises. This puts the formation of a larger, more integrated financial regulatory body in sight.
Yi Gang, governor of the People's Bank of China, said recently that "the overall plan is to make China's financial system more perfect, more efficient, safer and more open to the outside world". It can be seen that the newly unveiled reshuffling of the country's financial regulatory facility is to better serve its economic development, and the establishment of a new, stronger financial regulatory body is not to limit the development of business players, but to balance financial safety and efficiency and lubricate the sector's further development.
BEIJING NEWS
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