CBIRC abruptly suspends bond quote data feeds
The abruptness and opacity of the move won’t help engender trust in China’s financial regulatory apparatus – something that’s a key goal for policymakers – nor is it an encouraging sign for foreign financial firms operating on the mainland, either…
Hong Kong Stock Connect expands by nearly 40%
This is financial opening with Chinese characteristics…
China creates two new Party-led financial planning commissions
Xi Jinping was clearly unhappy with the ability of the existing institutional structure to deal with mounting financial risks – including property and local government debt on the domestic side, and sanctions on the international side – and wanted the Party more firmly in control. Xi himself is likely to head the CFC, as he does the other four Party commissions…
PBoC cuts RRR by 0.25%
RRR cuts aren’t stimulus. The PBoC uses them to lower bank funding costs and ensure that there is sufficient liquidity in the financial system…
State Council overhaul of financial regulatory system strengthens central oversight of local watchdogs
A key challenge facing regulators at all levels over the next few years will be managing the excessive debt accumulated by local authorities. The problem emerged partly because local financial supervision bureaus let local governments get away with too much…
Yi Gang keeps his job as PBoC governor, Liu Kun stays on as finance minister
This is positive news for the economy. Liu and Yi are competent, professional, and respected. Both possess the political capital needed to drive policy amid a period of government transition, financial-sector restructuring, and economic uncertainty…
PBoC emphasizes need to reduce financial sector risk
Policymakers and regulators have done an impressive job cleaning up a chaotic sector that was arguably once the most prominent risk to the economy. Beijing now views this campaign as largely successful – and largely complete…
CBIRC calls for financial firms to “return to their roots”
Over the past five years, regulators have dismantled shadow banking, recapitalized problematic banks, and in general made the financial system far less risky. Recent developments have led us to believe that the next few years will be similarly tumultuous, however the focus on cleaning up the excesses of the system will diminish…
Two Sessions reports highlight need to control financial risk
Policymakers and regulators have done a bang-up job cleaning up a chaotic sector that was arguably once the most prominent risk to the economy. The objectives in the Two Sessions reports are largely aimed at tying up that campaign…
Financial regulators likely to see big pay cuts in overhaul of regulatory system
These salary cuts – if they happen – are more the consequence of the administrative overhaul than anything, but they also fit nicely into Xi Jinping’s narrative of Common Prosperity and an ongoing campaign to control oversized pay packets in the financial sector…
Chicago Mercantile Exchange to launch USD/CNH options in April
This is a boost for RMB internationalization, no doubt. CME is the world’s largest regulated FX marketplace and gaining its blessing will boost the attractiveness of holding and trading CNH. But, RMB’s internationalization is a marathon, not a sprint…
State Council to overhaul financial regulatory system
We expect the reforms will change the way Beijing approaches financial regulation, concentrating prudential supervision with the PBOC while building a new, robust agency focused on supervising the conduct of all financial institutions outside of the securities sector…
February foreign financial institution approvals and specific financial opening developments
Morgan Stanley; UBS; Van Eck; Warburg Pincus; Standard Chartered; Alvarez & Marsal
CSRC issues interim rules for “important” money market funds
These rules are part of a broader campaign by China’s financial regulators to clean up the capital markets and reduce systemic risk. They are also an effort to bring MMFs …
Cross-border RMB transactions hit record high in 2022
The proportion of cross-border transactions denominated in RMB is likely to increase in the coming years as China …
CSRC holds bond regulation work conference
The equity market will be the primary venue for up-and-coming companies to raise capital, but the bond market – which is nearly twice as large – must play a greater role in supporting non-government firms. While the CSRC has made major progress on equity market reform…
Former head of China Merchants Bank charged in corruption probe
Tian is clearly in big trouble, but his actions don’t appear to have caused major disruption to the functioning of the financial system. Xi’s objective is for the Party to have greater oversight, and …
PBoC holds financial markets work conference
Policymakers have said it before, and they’ve said it again here – the regulatory easing on big tech does not mean a return to the high-growth period of the 2010s. Instead, it means that …
Party chiefs removed from top bank and insurer
The Party does have a tendency to remove top state-owned company and government officials without giving a reason. Sometimes removals come before a promotion or retirement while…
Revived Central Financial Work Commission will tighten Party control over financial regulatory matters
This move appears to be a slap in the face to Liu He, and suggests that despite policymakers’ efforts to reduce financial risk, Party leaders aren’t happy with progress. This is also a blow to…