• Merging the banking and insurance regulatory commissions is expected to solve existing problems such as unclear responsibilities, cross regulation and absence of supervision
• Others are skeptical whether changes in China's regulatory environment will address significant issues within the country's financial system
• Guo Shuqing, a highly regarded reformer and chairman of the China Banking Regulatory Commission, was appointed as new head of the China Banking and Insurance Regulatory Commission

On March 13, 2018, the National People's Congress moved to merge the China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC), while delegating more policy making authority to the People's Bank of China (PBOC), as part of a sweeping government re-organisation plan that includes merging or eliminating at least a dozen agencies. The move was a welcome step that will help improve coordination among regulators and delineate clearer divisions of responsibility between them.

From organisation-based to function-based system

The current structure of China's regulatory landscape is sometimes called "one bank and three commissions," which has been in place since 2003. China Securities Regulatory Commission (CSRC) was established in 1992, followed by CIRC in 1998. In 2003, CBRC was carved out of PBOC. All of these were part of a modernisation scheme at a time when banks, insurers and securities companies were clearly distinct from each other.

However, the specialised regulation approach experienced a number of challenges from the rise of new technologies and firms that blurred the lines...

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Keywords:Regulation, Fintech, Banking, Insurance