China`s banking regulator will tighten control over risks in the financial markets, work more closely with the central bank and other regulators, and "resolutely follow" the leadership of a newly-formed financial stability committee, it said late on Monday.
The China Banking Regulatory Commission`s comments come after President Xi Jinping said on Saturday that the central bank would take a bigger role with a Financial Stability and Development Committee to be set up under the State Council.
Beijing sees financial security as a vital part of national security and has been looking to crack down on risky behaviour in the financial markets, such as insurers selling high-risk products and companies taking on excessive debt.
The China Banking Regulatory Commission (CBRC) said in the statement on its website it would strengthen controls to avoid financial risks, including those related to liquidity, credit and shadow banking. It said there was a "step-by-step" plan to reduce "chaos" in the market, without giving details.
The regulator will also boost cooperation with other bodies, something Beijing sees as key to cutting risks. Regulators now oversee different parts of a complex financial sector, but no single watchdog has a complete picture of the overall system.
"CBRC will resolutely follow the leadership of the Financial Stability and Development Committee, actively coordinate with the People`s Bank of China to fulfil macroprudential management duties, and strengthen cooperation with other financial regulators, ministries and local government," it said.
The two other main financial regulators are the China Securities Regulatory Commission and the China Insurance Regulatory Commission.
The banking watchdog added failure to catch, flag and deal with financial risks in a timely manner would be treated as a dereliction of duty, parroting comments made by Xi at the once-in-five-years government work conference that ended on Saturday.
In 2015, a poorly coordinated response to a stock market crash in China led to scrutiny of the government`s response, with Premier Li Keqiang openly criticising financial regulators` performance.
The CBRC will also convene a meeting in the near future with banking regulators from around the country to discuss how to implement measures decided at the work conference.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)