The newly established super financial regulatory body, the Financial Stability and Development Committee (FSDC), is designed to be the top-level executor and coordinator of the State Council's macroeconomic policies rather than to only safeguard the financial sector, according to experts directly involved in the Committee's preparatory work.
The priority task of the FSDC, which made its debut earlier this month with Vice-Premier Ma Kai as its head, is to effectively implement and coordinate economic and financial policy decisions made by the State Council, Mr Chen Daofu, deputy director of the Research Institute of Finance under the State Council's Development Research Centre, told China Daily in an exclusive interview.
Mr Chen's institute has submitted a plan to the State Council setting out the committee's specific responsibilities and organisational structure.
Coordinating and synergising the country's fiscal and monetary policies with key medium- to long-term industry development plans will be another important function for the committee, Mr Chen said.
Mr Wang Gang, deputy head of the institute's Banking Research Department, who was in charge of drafting the report, told China Daily that the key issue is to clarify the committee's area of responsibility, structure and operational mechanism.
According to Mr Wang and Mr Chen, a general framework for the FSDC is expected to be ready before the National People's Congress, which is scheduled to be held in March next year.
As to whether the FSDC will hold regular work meetings and whether a detailed disclosure mechanism will be available are a subject for further discussions, they said.
The central bank, the People's Bank of China (PBOC), will play a dominant role in terms of financial regulation, leading the coordination work with the three regulatory commissions for banking, securities and insurance, he said.
Last Friday, the People's Bank of China outlined the unified standards for regulating asset and wealth management products across the financial sector, worth more than US$15 trillion. The move will cement the central bank's authority and tighten its grip on shadow banking.
The new regulation, aiming to crack down on risky, off-balance-sheet and highly leveraged borrowing among financial institutions, requires that provisions be made amounting to 10% of the management fees on asset and wealth management products.
Asset managers are now barred from offering a guaranteed rate of return to investors, and investors should take all risk on themselves, according to a statement on the PBOC's website.
Personal investors cannot use bank loans as investment capital for these products, while enterprises with high debt levels are banned from these investments, according to the PBOC.
A unified macro-prudential regulatory framework led by the central bank lays the foundation for the supervisory function of the FSDC to prevent systemic risks, said Mr Wang.