Financial regulation essential

International cooperation necessary to prevent future financial crisis as capital flows becomes more globalized

The recent financial crisis has exposed critical vulnerabilities in the modern financial system. However, the current reforms proposed by the Financial Stability Bureau and global standard setters, such as the Basel Committee on Banking Supervision, are certainly a step toward building a more resilient global financial system.

Chinese regulators welcome the new capital and liquidity standards approved by the G20 in November (the so-called BASEL III rules), and China's banking regulator, the China Banking Regulatory Commission (CBRC), has already begun the process of revising its own regulations so that BASEL III can be implemented by beginning of 2012.