A concept photo of stock market of Hong Kong Illustration: VCG

 
Anchoring the goal of building a financial powerhouse, China on Tuesday reiterated its determination to strengthen financial regulation with “teeth and thorns” and enhance the “regulation of the regulators.”

In an article published on the People’s Daily on Tuesday, the Office of the Central Financial Commission and the Central Financial Work Commission, two crucial bodies in China’s financial policymaking, jointly emphasized the need to ensure financial stability through stringent and solid regulation and to enhance regulatory capabilities.

It is crucial to strengthen regulation with “teeth and thorns”, push for strict enforcement of laws, and to establish a sound regulatory accountability mechanism, enhancing the “regulation of the regulators.”

The article emphasizes the need to safeguard financial security through prudent and effective risk prevention and control. It advocates adhering to the principle of “maintaining overall stability, coordinating policies, implementing targeted measures, and precisely defusing risks.”

This approach involves handling existing risks prudently, strictly preventing new risks, and effectively preventing and defusing financial risks in key areas in a powerful, orderly, and effective manner.

Enhancing regulation with “teeth and thorns” is of great significance. Through continuous supervision of financial institutions and markets, potential risks can be detected and resolved in a timely manner, thus preventing the occurrence of financial crises, Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Tuesday.

It is also beneficial for maintaining market order and protecting consumer rights, Wang said.

Currently, it is imperative to enhance financial regulation. On the one hand, with the continuous emergence of financial technology and innovative products, traditional regulatory measures may be difficult to cope with new risks; while on the other hand, some financial institutions may exploit regulatory loopholes or differences between different regulatory systems to engage in arbitrage, thus circumventing regulatory requirements, Wang noted.

Additionally, as global financial markets become more interconnected, China needs to strengthen regulatory measures to enhance the stability and international competitiveness of its financial system, Wang said.

Over recent months, China’s financial regulatory authorities have repeatedly mentioned the need to focus on strong and strict supervision, and resolutely aiming for regulation with “teeth and thorns.”

The National Financial Regulatory Administration held a work conference on January 30, vowing to enhance regulation, firmly safeguard the bottom line of preventing systemic financial risks, solidly promote high-quality financial development, and steadfastly follow the path of financial development with Chinese characteristics.

The article on Tuesday also noted that it is essential to deeply understand that the fundamental purpose of building a financial powerhouse is to serve the goal of achieving Chinese modernization. 

Global Times