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China Intensifying Financial Supervision
China is strengthening its financial supervision and management to keep the sound development of finance industry, said Cai Esheng, assistant president of the People's Bank of China (PBOC), also president of Shanghai Branch at the China Investment Forum held on May 10.
Cai said, in order to effectively exercise the supervision duty, the PBOC has taken a series of measures to intensify its financial management in the following aspects:
First, set up a management system. The PBOC formally handed over its insurance supervision duty to China Insurance Supervision Committee (CISC) after CISC was set up in November 1998. Therefor, a separate management and supervision system of bank industry, security industry, insurance industry is taking shape.
Second, reform the management system of the PBOC. The PBOC abolished 32 province-level branches set up according to administrative regions. Nine branches were set up. The new banking system of the PBOC is to guarantee the independence of the PBOC, exercise the duty of the PBOC justly. The new system is exerting its function.
Third, implement financial supervision responsibility system. The PBOC constituted and carried out financial supervision responsibility system to definitude the responsibility and duty of relative departments, branches at different levels , thus perfecting the system.
Fourth, deepen reform of commercial banks. In accordance with the capital adequacy ratio set by "Basel Agreement",China issued 270 billion yuan's special treasure bond in 1998 to replenish the minimum capital requirement of the four state-owned commercial banks to increase their ability to resist financial risks, China set up 4 financial asset management companies in 1999 for taking over and disposing with those bad assets, thus creating conditions for the state-owned commercial banks to raise their market competitiveness.
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