But the leaders of the various financial regulatory agencies already meet regularly at the offices of the State Council, which is China’s cabinet, although these meetings are not officially at the level of a commission.
Some economists speculated in the final days before the two-day conference that at least the State Council meetings would be moved to the central bank. Allowing the central bank to serve tea and provide a conference room might give the central bank staff a little extra confidence by allowing them to negotiate as hosts. The central bank also has a history of advocating broader financial reforms than the other principal financial regulatory agencies: the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission.
But the leaders did not even move the meetings away from the State Council’s offices to the central bank. And the result of the conference fell far short of predictions that the regulatory agencies might become clearly subservient to the central bank.
The statement that accompanied the end of the conference did mention that the central bank had a role to play in preventing systemic financial risk. That is already the role of central banks in many countries. But Gary Liu, the president of the China Financial Reform Institute, a research group based in Shanghai, said that the specific mention of it in the statement might strengthen the central bank’s hand somewhat.
But he was skeptical of the new commission, noting that it would lack legal powers and have very few staff members. “China failed to achieve a real breakthrough in financial regulatory reform, and the rising conflicts between financial regulation and financial realities will continue to create troubles in the coming years,” Mr. Liu said.
Overall debt has been soaring in China, and Moody’s Investors Service downgraded China’s sovereign debt rating by a notch on May 24 on concerns that China has struggled to contain further increases in that debt. Chinese officials are quick to acknowledge the importance of financial health to the Chinese economy, which has become the world’s second-largest economy after the United States’, with extensive links to practically every other country around the world.
State-controlled media carried a statement that described President Xi Jinping of China as having said at the conference, “Finance is an important…