- Central bank wants balance sheet for entire financial sector
- People’s Bank of China seeks expanded access for gauging risk
China’s central bank is trying to reshape regulation to establish a more systematic way for data to be shared between the nation’s financial regulators, according to two people familiar with the matter.
The People’s Bank of China wants to build a balance sheet for the entire financial sector that gives an accurate reflection of assets and liabilities, said the people, who asked not to be identified because they’re not authorized to speak publicly. To do so, it’s working to reshape existing regulations on how agencies collect and share data, with any rule changes needing approval from the State Council, the people said.
Information on financial firms including brokers and insurers is currently supervised by other agencies such as the China Securities Regulatory Commission and China Insurance Regulatory Commission, said the people. The PBOC press office didn’t respond to faxed questions seeking comment on the plan.
Centralization of financial data under the PBOC’s direction would mark the latest step in cementing its role as the central force for finding and defusing risks in China’s financial system. In the aftermath of the past year’s market plunges and rapid growth in online financing, the government is weighing how best to overhaul monitoring and enforcement.
Assessing risk requires central banks to "make decisions on the basis of a large amount of economic and financial statistics," PBOC Deputy Governor Chen Yulu wrote in an article published in May by China Finance, a publication of the monetary authority. Timely, accurate data is crucial to do so, as is widening the scope of statistics coverage to have a "full comprehension of the financial market," he wrote.
A new pilot program suggests the PBOC is already working to put the data sharing system in place. Regulators said in March they would begin joint trials in Tianjin, Anhui, Zhejiang and Guangdong provinces to test cross-market, cross-sector statistics collection, the people said. The central bank wants to eventually expand the trials to the whole country, the people said.
The CSRC can collect data from listed companies, asset managers, exchanges, securities firms and futures brokers, the regulator said in a 2009 publication without specifying what information it gathers. The CIRC currently collects information on the financial standing of insurers and their staffing levels, according to a 2013 publication.
The PBOC still needs to confer with other regulators about its proposals, which haven’t yet been formally submitted to the State Council, China’s cabinet, according to the people.
In May, the PBOC expanded its powers to cap cross-border capital flows by adding controls for banks and companies to its new Macro Prudential Assessment. That risk-monitoring system, announced in December, was soon expanded to include bonds, equities and off-balance sheet assets held by commercial banks, giving the central bank monitoring authority that was once the turf of the banking regulator.
— With assistance by Yinan Zhao, and Steven Yang