Bloomberg reports that a senior central bank official proposed to the national parliament that China should create a new law to better coordinate policies to maintain financial stability and prevent risks.
The suggested new law should make it clear that the Financial Stability Development Committee is in charge of planning and organizing work related to risk prevention, Liu Guiping, deputy governor of the People’s Bank of China, said.
The proposal comes as policymakers look to shift their focus back to controlling risks and and debt in the economy, which is set to rebound this year. Building a system to prevent systemic financial risks will be the priority of the central bank’s work over the next five years, Deputy Governor Chen Yulu said.
“The prevention and resolution of financial risks requires a solid legal foundation,” wrote Liu. “There’s no time for us to delay in establishing a unified, orderly, efficient and authoritative legal system for maintaining financial stability.”
Financial risks have been piling up in China for a long time, creating a grim challenge to financial stability, Liu said, adding that there is still vulnerabilities in the system.
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