China’s super financial regulator headed by vice-premier more powerful than ministries

China officially launched its new super financial regulator on Wednesday, four months after President Xi Jinping ordered the creation of the agency to tackle financial risk.

The Financial Stability and Development Committee under the State Council had already convened its first meeting and defined a wide range of functions, according to a brief report by Xinhua.

The committee was headed by Vice-Premier Ma Kai, the report said. That means it will have a higher political ranking than the various government ministries already involved in financial oversight.

The agency would supervise China’s monetary policy and financial regulation, the report said. It will also formulate policies on systemic financial risk management and maintaining China’s financial security, and give local governments guidelines on their financial development.

In addition, it would have the authority to supervise and question financial regulators and local governments, making it a powerful institution rather than a toothless coordinating body, according to the report.

Xi’s order to create the organisation reflects the president’s concerns about the financial risks facing China, after the stock market rout in the summer of 2015 and the mushrooming of illegal fundraising schemes that the government fears are a tinderbox for social unrest.

The previous financial regulatory framework – comprising the People’s Bank of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission – proved too fragmented to prevent or manage systemic risks.

The creation of the committee is the biggest institutional change to the Chinese government since the Communist Party’s national congress last month, at which Xi further cemented his grip on power.

According to earlier official statements, a general affairs office for the committee will be set up at the central bank to run day-to-day operations.

Apart from Ma, the Xinhua report did not name any of the committee members.