New | China may keep CSRC as a standalone watchdog as urgency eases on creating super regulator
Discussions are still ongoing as to whether to fold the banking and insurance regulators under the purview of the People’s Bank of China, officials said
China’s government is likely to maintain the securities regulator as a standalone agency, pushing back against public opinion and an increasing call to amalgamate the country’s three financial services watchdog bodies into a “super regulator”.
The China Securities Regulatory Commission (CSRC), the overseer of the world’s second largest equities market, is likely to continue operating separately from the central bank, two regulatory officials told the South China Morning Post.
Discussions are ongoing whether to combine the China Banking Regulatory Commission and the China Insurance Regulatory Commission under the supervision of the People’s Bank of China, the two officials said.
The current supervisory structure dates back to 2003 after China became a member of the World Trade Organisation, where the People’s Bank of China has the mandate to implement monetary policy, manage the country’s exchange rate while managing the national mint. A regulatory body was created for each of three types of finance: equities, banking and insurance.
More than a decade since their establishment, Chinese regulators find themselves challenged by the high-speed flow of international capital, technology and intersecting businesses in the financial industry, where some insurers now run banks, while banks’ funds increasingly find their way into the equity markets.
Criticisms swirled last summer, when a bull run abruptly ended on the Chinese stock market, wiping out trillions of yuan of value in two days. The securities regulator was caught flat footed and unable to tamp down a market rally that was fuelled by easy financing.