The first task of China's newly formed banking and insurance regulator is to improve corporate governance at financial institutions it oversees while boosting their risk management and internal controls, reports Reuters citing a top regulatory official.
The China Banking and Insurance Regulatory Commission (CBIRC) will guide banks and insurers to return to their core businesses and support the real economy, CBIRC Vice Chairman Wang Zhaoxing said at the China Development Forum in Beijing at the weekend.
The regulator—formed after the recent merger of China’s banking and insurance watchdogs—will also tell them to reduce unnecessary off-balance sheet business, Mr Wang said. The merger was approved by lawmakers on 17 March as part of an institutional restructuring plan of the State Council, the Cabinet.
In a related development, Mr Guo Shuqing, chairman of the China Banking Regulatory Commission, has been named Party Secretary of the CBIRC, the country's top banking regulator said in a post on its website last Thursday.
Mr Guo said at the appointment meeting that the formation of the CBIRC "is of great significance in terms of promoting the construction of a modern financial regulatory framework, improving the ability to regulate banking and insurance activities, and waging a tough war on financial risks", according to a report in China Daily.
He said the management team will push ahead in an orderly manner with the formation of the new agency and will continue to do a good job in regulation. In particular, he highlighted the importance of making sure that daily work such as financial regulation and major risk disposal will be carried out as normal during the process of institutional reform, according to the post on the CBRC website.
Mr Wu Qing, chief economist of China Orient Asset Management, who has been a research fellow on the banking sector for many years, said: “After the merger of banking and insurance regulators, the new agency will be more effective at execution of upcoming rules and policy adjustments."