China’s central government has officially released plans for the merger of the country’s banking and insurance regulators into a single authority.
Plans for the consolidation of the China Banking Regulatory Commission and the China Insurance Regulatory Commission were unveiled at the Two Sessions in Beijing on 13 March, as part of a raft of broader reforms of the country’s administrative and governance structure.
If approved by the Two Sessions, the move would mark a major shake-up for China’s financial regulatory framework, which has long been comprised of the “One Bank and Three Commissions,” (一行三会), a phrase referring to the Chinese central bank and the three separate commissions responsible for the banking, insurance and securities sectors respectively.
Should the merger go ahead, China’s financial regulatory bodies will instead consist of just “One Bank and Two Commissions,” comprised of the People’s Bank of China (the Chinese central bank), alongside the China Securities Regulatory commission and the newly formed China Banking and Insurance Regulatory Commission.
Domestic media reports that the proposed administrative shakeup coincides with changes of key personnel in the financial regulatory system, chief amongst them the imminent retirement of long-incumbent PBOC governor Zhou Xiaochuan.
Rumours of a merger between CBRC and CIRC have been circulating since the start of 2018, with sources reporting that Beijing hopes the consolidation will increase the efficiency and co-ordination of Chinese financial regulation, and help to shut down loopholes and other opportunities for “regulatory arbitrage.”