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Business / Markets

Coordination urged to ease market volatility

By Li Xiang (China Daily) Updated: 2016-03-05 08:28

China needs better coordination and communication among its various regulatory agencies to ensure financial stability, a former chief banking regulator said on Friday.

Coordination urged to ease market volatility

Liu Mingkang, former chairman of the China Banking Regulatory Commission

The comment underscored the need for an overhaul of the country's financial regulatory system in the wake of the stock market rout since the summer.

Liu Mingkang, former chairman of the China Banking Regulatory Commission, said that multiple issues need to be addressed before reforming the existing financial regulatory agencies.

Also a member of the National Committee of the Chinese People's Political Consultative Conference, Liu was responding on the sidelines of the ongoing CPPCC meeting to earlier media reports that suggested that China is mulling the creation of a financial super-regulator as early as this year.

Options that are being discussed include a merger of the securities, banking and insurance regulatory commissions, according to the reports.

Pan Gongsheng, the deputy governor of the People's Bank of China and a CPPCC member, said on Friday that the Chinese authorities are studying the reform plan but there is no timetable for it.

The overhaul of China's financial regulatory framework has been in prime focus as the sharp volatility in the Chinese stock market has triggered calls for enhanced coordination and communication among various regulatory agencies.

Proposals are likely to be discussed by the country's lawmakers as the annual session of the National People's Congress, the top legislature, opens on Saturday.

Cai Esheng, former vice-chairman of the banking regulatory commission, said that the reform of the financial regulatory system should not be simply a combination of the securities, banking and insurance regulators.

"Clearly defined regulatory roles are needed first," Cai, who is also a CPPCC member, told China Daily on the sidelines of the CPPCC meeting.

"The ultimate purpose of the reform is to ensure a healthy and stable development of the financial sector and to improve the regulatory efficiency," he said.

The effort to reform the country's financial regulatory system took a step forward in 2013 when the State Council instructed the People's Bank of China to coordinate meetings on monetary and financial supervision.

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