The Chinese Banking and Insurance Regulatory Merger

时间:2018-12-14

On March 13, 2018, the National People’s Congress reviewed the “State Council Institutions Reform Plan” resulting in their decision to merge the CBRC and the Chinese Insurance Regulatory Commission into “The Bank of China Insurance Regulatory Commission.” The implications of the merger have strengthened the functionality, draft responsibilities, insurance regulations and the prudential oversite of the central bank. The reform of the financial supervisory authority was re-established under the same context of the State Council’s reform of the major departments. The number of departments at the ministerial level of the State Council has been reduced by eight, and the number of sub-ministerial level banks has been reduced by seven. After the plan is implemented, the State Council will have set up 26 departments.

The merging of the two entities fits the trend that China’s financial industry is becoming an industry of mixed operations. The supervision structure is an important factor for maintaining functional supervision between their separate industries:
 
China’s financial reform follows the current trends of the world’s financial reform. The current changes are primarily based off of similar reforms in the United Kingdoms’ “Super Central Bank”, and the “Federal Reserve + Securities Regulatory Commission” of the United States. China has a very large finance sector, and the potential growth and complexity of the financial industry is immense. The purpose of China’s financial system is to serve the domestic economy rather than cross-border projects. Therefore, our financial reforms’ orientation is a similar to the United States.

Under the new reform, we have made the following predictions about the finance industry:
In conclusion:

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