China may not take a page, or several, from the U.K. when it comes to financial regulation.
As reported by Caixin Global, the People’s Bank of China will “take the lead” in coordinating regulation, a strategy that was telegraphed in remarks on Friday (March 9) from bank governor Zhou Xiaochuan. The governor stated the central bank “will play an even more important role” as the country adopts new regulatory standards.
In tandem with that oversight, the country is not on course to adopt what might be viewed as a model similar to the one in the United Kingdom. Instead, reported Caixin, Zhou pointed to the establishment of the Financial Stability and Development Committee, which has been viewed as a “super financial regulator” that will be tied to the central bank.
Zhou made the remarks at a briefing held at the National People’s Congress when asked about a “twin peaks” model (the U.K. model), which offers oversight across two realms: business and consumer protection. That model is an unlikely one for China, at least in the near term, according to Zhou.
“Our institutional reform will still be mainly based on China’s circumstances,” he told reporters. “We studied financial regulatory organizations around the world, including the ‘twin peaks’ model. We feel more time is needed for observation, and we are not necessarily adopting the ‘twin peaks’ regime.”
Among the key concerns for China as it tackles financial regulations, according to Zhou: speeding up actions tied to “problematic financial institutions and quasi-financial organizations.” The framework has been a divided one, with the past decade and a half marked by security firm and insurance firm oversight under the purview of the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission. The central bank, of course, has had oversight of monetary policy.