MNI: PBOC Officials: Reform Improves Regs Efficiency - Press

     BEIJING (MNI) - China's move to reform financial regulation regime will

improve the effectiveness of financial regulation, Xu Zhong, the Director

General of the Research Bureau of the People's Bank of China, said in an article

published on Caixin on Tuesday.

     China will merge the China Banking Regulatory Commission (CBRC) and the

China Insurance Regulatory Commission (CIRC) to form the new China Banking and

Insurance Regulatory Commission. The move, according to Xu, is in accordance

with the trend of all encompassing operations of financial institutions.

     As banks and insurance companies more frequently operating in each others

space, combining the CBRC and CIRC will improve regulation efficiency and

quality while also making the best use of regulation resources, Xu said.

     One important reason causing financial risks to accumulate over recent

years is that regulators are responsible for both the development and

supervision of the financial sector, although the two targets are often in

conflicts with each other, Xu added.

     The PBOC will be in charge of financial development and regulators will

only focus on financial regulation after the reform, which will increase the

transparency of regulation policies and prevent systemic financial risks, Xu

noted.

     Ma Jun, the former Chief Economist of the PBOC's research bureau, said the

reform will help to avoid the policy signal conflicts among different

regulators, and will provide a better environment for the coordination of

monetary policy and macro prudential policies, the Securities Times reported

Tuesday.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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