China’s central bank and the Federal Deposit Insurance Corp. signed an agreement to work together as the world’s second-largest economy prepares to introduce a system of protection for savers.
The memorandum of understanding seeks to strengthen communication and policy coordination on depositor protection and management of cross-border financial institutions, according to a statement posted on the People’s Bank of China’s website yesterday. The pact updates an agreement signed in 2007, the FDIC said in a separate statement.
China is accelerating the establishment of a deposit insurer as the government seeks to deregulate interest rates and reduce the state’s role in the economy. Insurance may be the next step in the liberalization process, four out of 12 economists said in a survey by Bloomberg News last month.
— With assistance by Regina Tan