China’s cabinet is preparing to take on a bigger role in overseeing financial markets, Reuters reported, citing an unnamed source close to the country’s leadership.
Perceived missteps by existing regulators are fueling concerns worldwide that Beijing may be losing its grip on economic policy as growth decelerates to its slowest level in a quarter of a century, the report said.
It said the State Council has set up a working group, headed by deputy secretary general Xiao Jie, a former vice finance minister and tax chief, to prepare to upgrade the cabinet’s financial department to a bureau.
After last summer’s stock market crash was blamed in part on poor coordination between financial regulators, the report said, China was considering merging its banking, insurance and securities watchdogs into a single “super-commission”.
This month’s renewed stock market turmoil has made it more urgent to unify the regulatory system to restore confidence in markets and ward off financial risks.
“The leadership is very unhappy about the stock market crisis,” the source said. “A merger of the regulators may take years to complete.”
Thus the move toward an interim agency by upgrading of the cabinet’s financial department.
Bloomberg reported earlier that the cabinet has created a new department within its general office to coordinate between the financial and economic regulators, with Agricultural Bank of China vice president Li Zhenjiang in charge of daily operations.
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