China Reforms Financial Regulatory Body to Improve Financial Security

From June 14 - 15, 2017, China held the fifth National Financial Work Conference in Beijing, manifesting a new regulatory institution. The institution is called the National Financial Stability and Development Committee, which will be the decision-making body that has the power to supervise the existing Chinese regulatory agencies.

What does the new financial regulatory body do?

Since 1997, China has been conducting the National Financial Work Conference twice every 10 years. The conference was created to review current financial policies and the agencies that will regulate them. All these are geared towards the improvement of China's financial system.

During the meeting, members have discussed the reformation that the National Financial Stability and Development Committee will bring. One of their major roles is to control the jurisdictional overlaps of the other three regulatory bodies in China.

Now under their supervision are The China Banking Regulatory Commission (CBRC), the China Insurance Regulatory Commission (CIRC), and the  China Securities Regulatory Commission (CSRC). One more bank included in the list is the People’s Bank of China (PBoC).

The new financial regulatory body is to organize and centralize the interactions of the regulatory bodies in an effort to grow the economy in accordance with China’s 13th Five-Year Plan. Also, according to the director of China’s Financial Reform Institute, Liu Shengjun, the Central Political Bureau of the Communist Party of China deem that the changes are critical steps for increasing national financial security.

In his op-ed, Shenjun also explained the five areas of the new financial regulation that supports this idea.

Modernization of China’s economy

Recent news also suggests that along with the goal of economic  improvement, China is also aiming  to modernize the economy. The National Financial Stability and Development Committee is already preparing for the time China decides to act upon the cryptocurrencies.

There is no other information regarding this claim yet as the event was a closed door conference.

What is certain, however, is that China has been considering to create their own digital currency for a year now.