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January 26, 2018 at 12:35 PM
China is considering a merger of its banking and insurance regulators, people familiar with the matter said, as it seeks to better coordinate its attempts to counter financial risks in the world’s second-largest economy.
Government agencies under the direction of a Communist Party central reform group led by President Xi Jinping are drafting a plan that would combine the China Banking Regulatory Commission and the China Insurance Regulatory Commission under a single head, the people said, asking not to be named because they aren’t authorized to discuss the matter publicly.
The possible regulatory shake-up suggests that China’s leadership wants to streamline its campaign to deleverage the economy, a top priority as Xi began his second five-year term last year. Both banks and insurance companies have been involved in the rapid growth of China’s shadow banking sector, another key focus of the regulatory clampdown.
(Related: FSOC Member: Some Colleagues Do Not Understand Insurance)
The plan, which is under discussion and may yet still change, could be announced after the National People’s Congress begins its annual session on March 5, two of the people said. Alternative plans that have been discussed include creating a “super regulator” that also includes the central bank and stock market watchdog, as well as giving the People’s Bank of China greater oversight over the other three main regulatory bodies.
A representative of the Information Office of the State Council — which represents the government — said the office didn’t currently have any relevant information. The CBRC and CIRC didn’t immediately respond to faxed requests for comment.
Last year, Xi announced the creation of a new Financial Stability and Development Committee to improve coordination among different government agencies as economy-wide debt approaches 260% of output. Liu He, a key economic adviser to Xi, may soon head the body.
