China has set up a committee under the State Council to oversee financial stability and development, according to an official statement Wednesday.
The committee will be an office of the council, focusing on the deliberation and coordination of major issues concerning financial stability and related reform and development, according to the statement
China announced that it will set up the committee during the two-day National Financial Work Conference in July.
"The committee will be tasked with deliberating major reform and development programs for the financial sector, coordinating financial reform, development and regulation, coordinating issues concerning monetary policy, and coordinating the making of financial policies and related fiscal and industrial policies," the statement said.
The committee will also be responsible for analyzing international and domestic financial situations, addressing international financial risks, and conducting policy research on systemic risk prevention and treatment and financial stability.
Vice Premier Ma Kai will serves as head of the committee.
Speaking at the committee's first meeting, Ma said China would maintain prudent monetary policy, strengthen coordination of financial regulation and boost risk prevention.
Ma also stressed the importance of the financial sector better serving the real economy, as well as safeguarding financial security and the rights of financial services consumers.
The establishment of the committee is seen as a key step in the country's effort to safeguard financial security and prevent financial risk. Policymakers have put improving the financial regulatory system high on the agenda in an effort to contain risk.
"The reason why China has decided to launch a financial stability and development committee is that it could shore up weak links in supervision and strengthen comprehensive coordination," said Lian Ping, chief economist with the Bank of Communications. "A fragmented and segmentary system has led to blind spots in supervision and financial arbitrage, the introduction of the committee will improve the effectiveness of regulation."
Lian said the financial stability and development committee would be an authoritative decision-making body rather than an advisory one, adding that the role of the committee and the function of the central bank were complementary.
Xu Hongcai, an economist with the China Center for International Economic Exchanges, agreed with Lian, saying the committee aimed to enhance coordination and improve weak links in financial oversight.
"The committee will elevate the level of financial supervision, enabling the country to better deal with financial risks from home and abroad and push forward economic restructuring," said Zhou Xiaoquan with Central China Securities.