Date
29 May 2017
It was on Xiao Gang’s watch that unchecked leverage drove a jump in equities from late 2014 before a collapse in June last year. Photo: Reuters
It was on Xiao Gang’s watch that unchecked leverage drove a jump in equities from late 2014 before a collapse in June last year. Photo: Reuters

China sacks top securities regulator in wake of market crash

The head of China’s securities regulator has been sacked in the aftermath of the country’s US$5 trillion stock market bust last year, Bloomberg reported.

Xiao Gang, 57, a former head of Bank of China Ltd., had been chairman of the China Securities Regulatory Commission (CSRC) since March 2013.

His departure was announced Saturday by the official Xinhua news agency, which cited a State Council statement.

Xiao will be replaced by Liu Shiyu, formerly chairman of Agricultural Bank of China.

It was on Xiao’s watch that unchecked leverage drove a jump in equities from late 2014 before a collapse in June last year that triggered government stock purchases, restrictions on stake sales and a temporary ban on initial public offerings.

Last month, a red-faced CSRC scrapped circuit breakers within four days of their introduction as they appeared to aggravate the turmoil in trading rather than stabilizing the market.

“Somebody needed to bear responsibility after the suspension of the circuit breaker system,” Zheng Chunming, a Shanghai-based analyst at Capital Securities Corp., was quoted as saying before the announcement.

Last week, Premier Li Keqiang became the the most senior official to fault regulators’ reaction to the market turmoil, saying at a State Council meeting that they didn’t respond actively to declines.

Li didn’t specify which regulators. He defended the decision to intervene in markets as necessary to head off systemic risks, a Beijing News report carried on the government’s website said.

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