People's Bank of China hires two new deputy governors in battle against financial risks
This is the biggest change of the country’s central bank leadership structure in a decade
China’s central bank has boosted the number of its deputy governors to fulfil its expanding role in battling financial risks in the word’s second-largest economy.
The People’s Bank of China (PBOC) added two new deputy governors, increasing the quota of deputies from four to six, according to Chinese financial magazine Caijing. The central bank’s website has not updated its leaders’ page, which still showed four vice-governors. The bank did not reply to requests for comment.
If confirmed, it would mark the biggest change in the central bank’s leadership structure in a decade, reflecting Beijing’s precautionary institutional arrangements to cope with an increasingly complex financial world at home and a rising challenge of trade war abroad. The internal structure of the central bank should have one governor and four deputies, according to a central government statement issued in 2008.
According to the Caijing report, one of the new deputy governors is Liu Guoqiang, who was an assistant governor at the PBOC, and the other is Zhu Hexin, who was a deputy governor in Sichuan province and is a veteran Chinese state bank official.
The new structure was expected to help the central bank perform its various functions, including cutting leverage in the economy, reining in shadow banking activities, and managing the yuan exchange rate, analysts said.
Unlike its Western counterparts such as the US Federal Reserve and the European Central Bank, the PBOC is part of the cabinet of the Chinese government and is legally bound to pursue four different, and sometimes conflicting, policy objectives: keeping inflation in check, ensuring full employment, promoting economic growth and striving for balance in international payments.
Chinese President Xi Jinping’s requirement of preventing systemic financial risks has added to the central bank’s workload. For instance, it was forced to step into the stock market directly during a rout in the summer of 2015.