‘Shut the revolving door’ between the watchdogs and the watched in China’s financial industry
Move essential to tamp down risks brought on by conflicts of interest, article in Communist Party mouthpiece argues
China needs to block the “revolving door” between financial regulators and the wider industry to stop conflicts of interest and stem risks.
That was message delivered in a leading comment piece in Communist Party mouthpiece People’s Daily on Monday, just days after a top central bank official said the industry was plagued by collusion between regulators and the regulated, or “an alliance between cats and rats”.
The article called on the authorities to “block vested interests between regulators and financial institutions and dismantle the revolving door between them, so that regulators can identify risks and make fair judgments”.
It is not uncommon for Chinese financial officials to quit their jobs for better-paying positions in the industry they formerly oversaw – just as there is a revolving door between Washington and Wall Street.
For example, in August 2016, Yao Yudong left his job as head of a research institute at the People’s Bank of China to take up a research role at Shenzhen-based Dacheng Fund.
Before him, Wu Ge, a division chief at a central bank unit in charge of exchange rate policy, left his state job to become a chief economist at Chinese brokerage Huarong Securities. At least three officials at the central bank’s payment department quit in 2016 for other positions, according to Chinese media reports.