Lecture Legal and regulatory aspects of banking supervision – Chapter 9
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al Approach, where the banking,
securities, and insurance sectors are
supervised by separate agencies.
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CASE-Example-China (Contd.)
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Since 1998, the China Securities
Regulatory Commission (CSRC) has been
the agency responsible for supervising
and regulating the securities and futures
sector.
It is responsible for listed companies,
securities firms, and markets. It focuses
on protecting medium and small investors.
Also in 1998, the China Insurance
Regulatory Commission (CIRC) 41was
CASE-Example-China (Contd.)
•
In 2003, the primary responsibility for
supervision and regulation of the banking
sector was moved from the People’s Bank
of China to the new China Banking
Regulatory Commission (CBRC), whose
responsibilities include banks, financial
asset management companies, trust and
investment companies, and other
depositary financial institutions.
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CASE-Example-China (Contd.)
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Its responsibilities include approving new
banking institutions, formulating prudential
rules and regulations, and conducting
examinations. The People’s Bank of
China’s role is now limited to formulating
and implementing monetary policies and
maintaining financial stability.
It nevertheless retains a role in policy
formulation. Specifically, the Governor of
the People’s Bank of China is a 43
member
CASE-Example-China (Contd.)
•
Given the evolution of financial markets,
the Institutional Approach in China is
facing the need to accommodate
marketplace changes as the financial
services industry becomes increasingly
integrated and the lines between
traditional banking, securities, and
insurance businesses become blurred.
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CASE-Example-China (Contd.)
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Through holding companies, banks and
other institutions have begun to offer
products outside their traditional areas of
activity, thus creating issues of supervisory
prerogative.
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CASE-Example-China (Contd.)
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For example, questions arise when an
insurance company offers a traditional
banking product. Should the product be
regulated by the CIRC or the CBRC?
Issues such as this arise with increasing
frequency as the product and services
offered by banks, securities firms, and
insurance companies become more
similar.
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CASE-Example-China (Contd.)
This puts greater pressure on supervisors to
coordinate before they act. The Chinese
authorities believe that their efforts at
coordination generally have been
successful.
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Summary of this session
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Institutional Approaches to Banking
Regulation
–
Introduction
–
Background
Policy Goals of Regulations
Safety and Soundness of Financial
Institutions
Mitigation of systematic risk
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THANK YOU
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