Research team on China's financial reform strategy, by Lei Wei, Ren Haocong & Wang Gang, Development Research Center of the State Council (DRC)

Report No 1, 2015 (Total 4686)

Abstract:

This paper, based on international experience, comes up with suggestions on ways to improve China's financial regulations from the perspectives of governance reform and framework reform. In the area of regulatory governance, the government needs to increase resources and supervisory abilities, separate supervisors from financial operations and build an appropriate accountability system. In terms of regulatory framework, the government needs to come up with a blueprint and goals for different stages. It also needs to clarify the role of local governments in financial supervision and their relationship with central supervisors. In taking China's conditions into account, this paper believes that improving the regulatory environment is a prerequisite for better financial regulations, by getting rid of market expectations on implicit government guarantees, clarifying government's function as owner and regulator of financial institutions, and improving financial company management.