China's newly announced cabinet committee on financial stability and development plays a vital role in containing risks arising from the country's rapidly changing financial sector, a central bank official said Tuesday.
The committee will have its office based at the People's Bank of China (PBOC), the official told Xinhua while declining to be identified.
Its responsibilities include making plans for financial development and reforms, coordinating financial policies to create synergy in regulation, drafting rules to fill regulatory gaps, and holding officials accountable for inadequate regulation, the official said.
The committee is an upgrade of China's current financial regulatory framework for preventing risks and maintaining stability, according to the official.
A more powerful, effective and methodical regulatory framework is needed to contain financial risks, which have accumulated since the global financial crisis as new business types emerged and information technology developed rapidly, the official noted.
China announced that it will set up a committee under the State Council to oversee financial stability and development during a two-day National Financial Work Conference that ended Saturday.
The conference also stressed that the central bank will play a stronger role in macro prudential management and guarding against systemic risks.
"These [decisions] are aimed at coordinating all efforts like the moves in a chess game to safeguard the nation's financial stability, cope with possible financial risks both at home and abroad, and ensure smooth progress of the country's economic transition and development," the central bank official said.
The PBOC will firmly implement a prudent monetary policy and continue its macro prudential management, so that it can maintain "reasonable liquidity" to support the real economy while fulfilling the deleveraging task at the same time, according to the official.
Particularly, the central bank will attach importance to the regulation of systemically important financial institutions and prevent risk contagion across different industries and markets, the official noted.
The weekend conference highlighted three tasks in the financial field, namely making the financial sector better serve the real economy, containing financial risks and deepening financial reforms.
The conference has been held every five years since 1997 and is widely considered to set the tone for financial reforms.
