Global News

China to tighten banking and insurance control

China to tighten banking and insurance control

Functions such as drafting key regulations and prudential oversight will be transferred to the PBOC, according to the document.

Divided between China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission (CIRC), regulators now oversee different parts of China's complex financial sector, and no single regulator has a complete picture of capital movements in the system.

The massive reshuffle plan of various ministries is aimed at making the government better-structured, more efficient, and service-oriented.

Xi, 64, is set to continue for a life term as the NPC approved the removal of the two-term limit for the president and the vice president.

The new regulator will be capable of "holding the bottom line to prevent systematic financial risk", the parliament document says.

Liu He, President Xi Jinping's top economic adviser, is overseeing that battle on financial risk and praised the reforms as "revolutionary" in an editorial published in Communist party mouthpiece the People's Daily on Tuesday.

"China's whole regulatory system will change directions, from sector oversight to oversight of specific financial activities", said Betty Wang an economist at ANZ Bank.




Among the new entities are a ministry of natural resources, a ministry of veterans' affairs and a ministry of emergency management.

There will also be new administrations, such as an global development cooperation agency, a state immigration administration, and a banking and insurance regulatory commission.

China's financial system has become increasingly tough to regulate due to its sheer breadth.

The ministry shake-up also includes the creation of a new immigration management bureau and the restructuring of the national intellectual property rights bureau.

There will be 26 ministries and commissions of the State Council after the reshuffle.

Such regulatory arbitrage and risky cross-asset investments have anxious policymakers.