Foreign experts advise a unified regulatory approach
Updated: 2014-09-29 07:34
By Jiang Xueqing(China Daily)
Foreign experts advised China to deepen financial reforms and strengthen regulation by having unified supervision across sectors during a forum of world experts on China's financial services development in Beijing on Sunday.
The forum was sponsored by the State Administration of Foreign Experts Affairs and the Development Research Center of the State Council. It discussed how China might learn from the success of the financial services sector in London after consulting with a number of foreign experts in the last two years.
Gerry Grimstone, chairman of Standard Life Assurance Co and chairman of The City UK, submitted a paper to the administration and said that the Chinese regulatory bodies have a specific sector of focus and have not been able to prevent the building up of potential systemic risk in areas they do not regulate.
Neither have they been able to prevent the inappropriate selling of financial products to customers who, very often, do not understand the risks of the products they are buying, Grimstone said.
"Customer products cross regulatory boundaries, and only a unified regulatory approach, backed up by stiff penalties, can provide the protection that is necessary," he wrote.
In his view, the role of the State in market-facing financial institutions should be progressively reduced.
"The State should operate only through specially established policy bodies or through transparent intervention," he wrote.
The importance of the rule of law, which Grimstone believes is paramount for markets to succeed, was also highlighted by other foreign experts.
Jonathan Blake, senior partner at King & Wood Mallesons SJ Berwin, said: "For financial markets and the financial sector to flourish, the rule of law has to be seen to operate at all times and to be accessible, with regulators being accountable but independent of political influence."
During the past two years, foreign experts have submitted 19 papers to China's top decision-makers on various topics including environmental protection, financial services and food safety.
Zhang Jianguo, administrator of the State Administration of Foreign Experts Affairs, said: "China is at a critical moment of deepening reforms. By listening to the advice of foreign experts, we have a chance to learn of the successful experiences as well as lessons of development from other countries."