China considers super-regulatory finance commission after Shanghai market crash

BEIJING – Having blamed the recent stock market crash on poor co-ordination between regulatory agencies, senior leadership figures within the Communist Party of China are considering bringing together banking, insurance and securities regulators in a single “super-commission” as part of a broader goal of reforming China’s financial markets.

The three agencies that may be merged are the China Securities Regulatory Commission, the China Banking Regulatory Commission and the China Insurance Regulatory Commission – apparently, sources say, the Central Government had already begun exploring a replacement for CSRC head Xiao Gang following the crash.

At the moment, it remains unclear whether the People’s Bank of China – China’s central bank – would be part of any new super-regulatory body. China is apparently looking at Britain’s regulatory set-up as a model, among other options.

“It’s quite difficult to differentiate between a securities company versus an insurance company verses an asset-management company, yet they are under different regulatory umbrellas and belong to different regulators. This leads to a lot of overlap,” observed economist Zhou Hao xof Singapore’s Commerzbank.

Discussions around a unified financial supervisory commission have been ongoing for more than a decade, but Chinese authorities have recently increased the frequency of public discussion regarding the need for major reform. www.webershandwick.cn (ATI).