Chinese economist: US financial sector needs int'l oversight

17:11, September 08, 2010      

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There should be some international financial institution to supervise the financial operations of the world's major reserve currency-issuing countries, Zheng Xinli, the Chinese People's Political Consultative Conference (CPPCC) member and vice director of the Economic Committee under the CPPCC, said at the 2010 Conference of the 21st Century Forum held by the CPPCC on Sept. 7.

Zheng said that as one of the major reserve currency-issuing countries in the world, the United States' financial security influence has gone beyond its national boundaries. Therefore, international regulations should be carried out on the financial operations of the major reserve currency-issuing countries. The regulations are "necessary and logical."

Zheng also said that it is completely feasible for national financial institutions to implement an international supervision function. Zheng has praised the laws strengthening financial supervision recently approved by U.S. President Barack Obama.

"This is the correct action after learning a lesson from the financial crisis," he said.

In fact, some experts from the European Union and the International Monetary Fund (IMF) had proposed to impose financial regulations via international institutions. Zheng believes that these proposals "should be discussed in more detail to further reach a consensus."

In March 2009, the IMF called for establishing an international financial regulatory system to supervise large hedge funds, private equity firms and other financial institutions that can possibly cause a global economic risk through their actions, and at the same time, taking measures to broaden the scope of international financial regulation.

By People's Daily Online


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