Is a UK model ‘with Chinese characteristics’ the answer for financial regulation?
Researchers say British system introduced in 2013 could be a good reference for Beijing as it tries to shake up oversight and control risk
China could adopt a UK-style financial regulatory system “with Chinese characteristics” to fix its loopholes, a group of researchers advised Beijing.
The idea, raised by academics from Tsinghua University and the London School of Economics and Political Science, comes amid a shake-up of China’s fragmented financial oversight system that will see two regulators merged and the central bank given more clout as Beijing tries to rein in the industry.
President Xi Jinping has listed financial risk control as a priority for the country after a stock market rout in 2015 and unprecedented capital flight, and bureaucrats have been scrambling to find a systematic approach to maintain stability.
But many questions remain unanswered about the new system, including the specific power of a newly formed financial stability committee, as well as the chain of command for supervision of the industry.
The move this month to split the roles of governor and party secretary of the People’s Bank of China added to confusion over Beijing’s institutional arrangements to keep the risk of a financial meltdown at bay.