The State Council’s Institutional Reform Plan (hereinafter referred to as the “Plan”) submitted to the National People’s Congress for deliberation has 13 reform measures.
Xiao Jie, Secretary-General of the State Council, mentioned in his plan explanation that this round of reform aims to strengthen the optimization and adjustment of institutional responsibilities in key areas such as science and technology, financial supervision, data management, rural revitalization, intellectual property rights, and aging work, transform government functions, and accelerate Build a government ruled by law.
This is the ninth round of institutional reform of the State Council since the reform and opening up.
It is noteworthy that 6 of the 13 reforms are directly related to financial supervision, including the establishment of the State Administration of Financial Supervision, deepening the reform of the local financial supervision system, the adjustment of the China Securities Regulatory Commission to an institution directly under the State Council, and the overall promotion of the People's Bank of China. Reform and improve the state-owned financial capital management system, and strengthen the unified and standardized management of financial management department staff.
Tian Xuan, deputy to the National People's Congress and deputy dean of Tsinghua University's PBC School of Finance, said in an interview with a reporter from China Youth Daily and China Youth Daily that a series of adjustments and changes in financial supervision during this institutional reform are an attempt to strengthen the party's work on finance. The embodiment of centralized and unified leadership is also an inherent requirement for building a unified, open, competitive and orderly market system, and accelerating the construction of a unified national market.
Eliminate the regulatory vacuum and serve the real economy
Regarding the functions of the State Administration of Financial Supervision and Administration, the plan mentions "strengthening institutional supervision, behavioral supervision, functional supervision, penetrating supervision, and continuous supervision."
Tian Xuan said that with the increasing integration of modern technology and the financial industry, major changes have taken place in the financial industry, risk patterns, transmission paths, and security boundaries; at the same time, with the uncertainties of the international situation The situation of financial risk is also complicated and severe, and new and old problems are intertwined and superimposed. It is necessary to adjust, form and improve the financial supervision mechanism that is more suitable for the needs of the current development pattern. While increasing the motivation of finance to promote development, financial risks will continue to be strengthened. Prevention and control capabilities.
He further explained that from an objective point of view, there are a series of mismatching problems between supply and demand between the main system and mechanism of my country's financial supervision and the current high-quality development pattern. Effective guidance does not leave enough space for market games; policy implementation is flexible and rules are unclear.
He believes that by strengthening the coordination of financial integration, preventing the regulatory vacuum caused by the fragmentation of regulatory agencies, and eliminating regulatory arbitrage, it will help finance to steadily advance supply-side structural reforms and enable finance to serve the development of the real economy with higher quality.
Form regulatory synergy to protect investors
The State Administration of Financial Supervision and Administration to be established will be responsible for the supervision of the financial industry other than the securities industry, and will be responsible for the overall protection of the rights and interests of financial consumers.
According to Tian Xuan's analysis, with the gradual deepening of mixed operations, the concealment and intersectionality of financial risks have increased significantly, and the extension of the financial industry has also continued to extend, especially the formation of mixed operations between other industries and the financial industry. A financial holding company that is the fusion product of financial capital and industrial capital.
For a period of time, financial holding companies have participated in many institutions, complex businesses, high correlations, and more hidden risks. In the absence of necessary legal and institutional supervision, chaos has occurred frequently.
For example, some Internet platforms set foot in financial business. While promoting technological innovation and improving service efficiency, they also expose many risks, such as unlicensed operations, regulatory arbitrage, and infringement of consumer rights.
Tian Xuan believes that in view of these problems, the State Administration of Financial Supervision and Administration to be established should not only achieve full coverage of supervision except the securities industry, but also pay attention to the rights and interests of financial consumers.
"Protecting the legitimate rights and interests of investors is a key factor in the reform and development of the capital market, which is related to the vital interests of the people." Tian Xuan noticed that the plan suggests that the CSRC's investor protection rights should be included in the State Administration of Financial Supervision and Administration.
He said that this reflects the country's great emphasis on investor protection, and it is a concentrated expression of the "people-centered" financial development concept.
He explained that from the perspective of the market, with the development of financial products becoming more and more diverse and complex, the investment needs of Chinese residents are developing in a diversified direction, but objectively speaking, among the investor groups in my country's financial market, Small and medium-sized investors account for the majority, investors have relatively weak risk awareness, and relatively lack investment expertise.
Tian Xuan believes that the assignment of investor protection duties to the State Administration of Financial Supervision and Administration this time is an institutional arrangement that deeply embeds the concept of investor protection into all aspects of financial transactions, such as market transactions, institutional supervision, and inspection and law enforcement. The top-level power conducts market-wide, cross-regional, and full-coverage regulation, improves the level of regulatory penetration, and better weaves a dense and solid investor protection network.
In Tian Xuan's view, further improvement of the investor protection mechanism requires further protection at the level of the legal system.
As a very important legal system in a mature capital market, the class action system fully mobilizes the power of the "silent majority" at the back end of regulation, and has a strong deterrent effect on all parties in the capital market, especially listed companies.
Problem-Oriented Reform of Local Financial Supervision System
The plan proposes to establish a local financial supervision system dominated by local agencies of the central financial management department.
Tian Xuan believes that this is a powerful measure to adhere to the problem-oriented approach, properly handle the boundaries of responsibilities between the central and local governments in financial supervision, achieve equal emphasis on promoting development and preventing risks, and improve the quality and efficiency of financial policy implementation across the country.
Tian Xuan said that in recent years, my country's financial supervision system has been increasingly improved, the division of labor between the central and local financial supervision has gradually become clear, and the coordination mechanism between the central and local governments has experienced a process of exploration and establishment from scratch.
However, under the previous system, it was difficult for the central vertical supervision to directly manage local finance outside the bank-securities and insurance system. Under the one-sided development concept, local governments in some regions intervened in finance, illegal fund-raising, and debt chain breaks and other financial chaos. And risk events occur from time to time, leading to prominent regional risks and hidden dangers.
He summarized several major problems in previous local financial supervision:
The first is to focus on development and neglect regulation.
When carrying out financial supervision work, local governments often proceed from their own realities. Driven by the idea of one-sided pursuit of GDP growth, they prioritize financial matters that can bring short-term economic benefits, and place the core responsibilities of financial services such as preventing risks and maintaining stability. In a secondary position or neglect, it leads to the disorderly development of the local financial industry and the continuous accumulation of financial risks, burying the hidden danger of regional risk outbreaks.
The second is that the supervisory functions are dispersed, and unified centralized management has not been realized.
The functions of financial management in most provinces are actually dispersed among multiple government functional departments, resulting in a series of problems such as overlapping regulatory responsibilities and difficulty in forming regulatory synergy.
Furthermore, the capacity of regulatory forces is insufficient.
Restricted by local development capabilities, the construction of financial supervision capabilities in most regions lags behind that of the central government, and most personnel lack the complete professional knowledge required for financial supervision, resulting in the lack of local financial supervision before and during the event. Identify and deal with financial risks in a timely manner.
"This reform plan, in terms of top-level design, makes an overall plan for strengthening the central and local financial regulatory coordination mechanism." Tian Xuan said that the next step should be to optimize specific operational details.
Reforming branches to create a modern central bank
The plan suggests that the reform of the branches of the People's Bank of China should be promoted in an overall manner.
Tian Xuan believes that a series of measures around this goal are aimed at implementing the "deepening the reform of the financial system, building a modern central bank system, strengthening and improving modern financial supervision, strengthening the financial stability guarantee system, and Bring all kinds of financial activities into supervision and keep the bottom line of no systemic risk.”
The central bank's "nine first-tier branches" (i.e., regional branches and central sub-branches under its jurisdiction) were established in 1998 to enhance the authority of implementing monetary policy and the independence of financial supervision.
After the reform in 1998, the central bank established four levels of institutions at that time: the head office-regional branches-central sub-branches-county sub-branches.
Tian Xuan said that, in fact, my country's central bank's "regional bank" system once faced controversy.
Some commentators believe that this initiative aimed at eliminating local government intervention in credit and monetary policy actually faces the problem of being unable to smoothly advance financial reform due to the lack of support from the local government.
Under the modern central bank system, the core function of the central bank is to manage the currency "general gate", provide high-quality financial infrastructure services, prevent and control systemic financial risks, control external spillover effects, and promote the formation of a fair and reasonable international financial governance structure .
In Tian Xuan’s view, according to the plan proposal, the People’s Bank of China’s function as the central bank will be further strengthened. By stripping off the non-core responsibilities of the modern central bank such as the supervision of financial holding companies and the protection of consumer rights, and improving the reform of branches, it will help Accelerate the establishment of a modern central banking system.
In particular, he mentioned that the establishment of branches according to administrative divisions will help break the institutional and institutional obstacles that existed in the efficiency of policy transmission in the past, improve the effectiveness of monetary policy, and help enhance the accuracy and targetedness of monetary policy in the implementation of macro-control. sex.
Liu Shixin, reporter of China Youth Daily and China Youth Daily (China Youth Daily)