China asks Britain for help to create financial super-regulator
Britain has been advising China as it plans to create a new super-regulator to control its financial markets, according to reports.
Chinese officials are looking to head off the stock market volatility that plagued its exchanges last year. Shares lost a third of their value in just one month having increased 150 per cent in the previous 12 months.
Currently, China has three main regulators that cover banking, insurance and securities. Each one reports directly into the cabinet and the reported proposals would see them merged into one umbrella entity.
It is thought that the proposals would provide a much stronger regulatory structure. The hope is that this would mitigate the need for employing recent state tactics such as persuading asset managers to support certain stocks and banning new listings and short selling.
Similar to changes made in the UK system over recent years, China is also reported to be considering increasing central bank powers – although unlike the UK, it would still report into the cabinet.
"The UK model is a reference, but we can't completely copy it," one of the sources told Reuters. "The UK model is worth us studying but it would have flaws when implemented in China."
The sources said that the Chinese had sent delegations to London during the first three months of 2016 to review the UK regulatory framework. UK officials reciprocated, with a visit to Beijing last month.