China considers merger of financial regulatory agencies

BEIJING (AFX-ASIA) - China is considering merging its three financial regulatory bodies into one agency to improve their effectiveness and help stamp out market abuses, China Daily's Business Weekly magazine reported, quoting Wang Lianzhou, a senior official at the National People's Congress finance committee. Under the proposal, which are at an early stage of discussion, the People's Bank of China's supervisory functions would be removed and merged with the China Securities Regulatory Commission and the China Insurance Regulatory Commission, Wang said. The paper said the three watchdogs currently police different parts of the financial sector, linked loosely through regular meetings of their top officials. Wang also said that allowing China's banks, insurance and securities companies to move into each other's markets would allow these institutions to compete with international rivals after WTO entry. Under the present system, commercial banks, insurers and securities houses are supervised separately by the three bodies so that these businesses do not overlap. The paper also quoted Wang Guogang, deputy director of the Institute of Finance at the Chinese Academy of Soinancial institutions "could not survive competition in the market due to their limited scale and backward management".

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