(Yicai Global) July 19 -- The establishment of the financial stability and development committee under the State Council will enhance effective, harmonized financial regulation, said a senior official with the People's Bank of China (PBOC).

The financial stability and development committee's main function is to choreograph China's financial reform, development and supervision, and ensure coherence between China's monetary, fiscal and industrial policies, Lu Lei, head of the financial stability bureau of the people's Bank of China, said in a July 17 interview with official media the People's Daily.

Problems of uncoordinated regulation, lack of supervision and lax enforcement in practice have come to light with the existing regulatory system, which is thus ill-adapted to cross-industry, cross-market innovation and development of financial products, Lu noted.

The financial stability and development committee will better orchestrate supervision, shore up weak links, and effectively ward off systemic financial risks, he said. The national financial work conference that wound up last weekend proposed the committee's set up underpinned by PBOC, the China Banking Regulatory Commission (CBRC), China Insurance Regulatory Commission (CIRC) and China Securities Regulatory Commission (CSRC) to exercise over-arching financial supervision.