Chinese Securities Regulator Able to Act Quickly to Prevent Financial Crises, Vice-Chairman Says at Davos
Zhou Ailin
DATE:  Jan 24 2018
/ SOURCE:  Yicai
Chinese Securities Regulator Able to Act Quickly to Prevent Financial Crises, Vice-Chairman Says at Davos Chinese Securities Regulator Able to Act Quickly to Prevent Financial Crises, Vice-Chairman Says at Davos

(Yicai Global) Jan. 24 – China is able to act quickly to ensure that any financial crises affecting smaller financial institutions do not lead to a ripple effect in the country and affect the global economy as a whole, said a high-ranking official within China's financial regulator.

"China's system can prevent a financial collapse because regulators are quick to act, ensuring panic does not spread throughout the system. Larger, healthy financial institutions lend a helping hand to smaller institutions so that the entire system can still work, said Fang Xinghai, vice chairman of the China Securities Regulatory Commission during a seminar at the World Economic Forum in Davos yesterday.

While answering questions on global concerns about China's potential financial risks, Fang said, "I am the only regulator present at this seminar. Regulators must always look out for any financial risks. Although the global economy is better overall at present, we should not be complacent."

"The economy in China is very large. If any negative impact occurs there, the global economy will be affected. So, everyone's concern about China is understandable," he added.

In addition to controlling financial risks, Fang also fielded questions on China's deleveraging process at the forum, stating that it good progress had been made.  

"We found many problems some years ago, the macro debt ratio and debt in non-financial sectors are very high with the debt to GDP ratio as high as 250 percent. We are also aware of this problem and started to take action two years ago. The good news is that the debt ratio stopped rising for the first time last year," he said.

"As of the end of December 2017, broad money (M2) increased by 8.2 percent over the same period of the previous year with a record low growth rate, showing the strength of policies," Fang noted.

Also present on the panel were Jes Staley, Michael Corbat and Anne Richards, respectively the CEOs of Barclays Bank, Citigroup and M&G Investments. Fang was also joined by Tom Keene, Bloomberg's Editor-at-Large, financier and philanthropist David Rubenstein, co-founder of The Carlyle Group and US Economist Kenneth Rogoff.

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Keywords:   Market Regulator,Financial Risk,Crisis Elimination