China is considering a merger of its banking and insurance regulators, as it seeks to better coordinate its attempts to counter financial risks in the world's second largest economy, reported Bloomberg citing people familiar with the matter.
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 CIRC and China Banking Regulatory Commission under a single head, the people said, asking not to be named because they aren’t authorised 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 Mr 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.
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 5 March, 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.
Last year, Mr Xi announced the creation of a new Financial Stability and Development Committee to improve coordination among different government agencies in the financial sector.