China will set up a committee under the State Council to oversee financial stability and development, to improve regulatory effectiveness and address regulatary challenges brought about by the increase in cross-sector financial services.
In addition, China's central bank, the People's Bank of China, will take on a bigger role managing systemic risk in the country's financial markets, reported the Xinhua News Agency.
These decisions were made at the National Financial Work Conference which was held on 14-15 July. The conference is held once every five years.
China's President Xi Jinping said that the government would increase the accountability of regulators and supervision over regulatory bodies. Mr Xi called it a "dereliction of duty" if the regulators fail to spot and dispose of risks in a timely manner, and stressed that coordination of financial regulation should be improved, and weak links in supervision strengthened.
The different financial regulators in the country include the China Insurance Regulatory Commission, the China Banking Regulatory Commission and the China Securities Regulatory Commission.
China will accelerate developing laws and regulations governing the financial sector, improve macro prudential management and emphasise functional as well as behavioural regulation, Mr Xi also said.
The conference this year was of particular significance because the authorities have embarked on an anti-corruption drive targeting the financial sector. This has already snared several billionaires and senior government officials including Xiang Junbo who was detained and removed from this post as CIRC Chairman earlier this year. The CIRC, which has admitted to gaps in its supervision of insurers, has been cracking down on risky activities in the sector since last year,