New committee key to financial sector reform and regulation

BEIJING - China's decision to establish a committee to oversee financial stability and development will be key to reform and coordinated regulation of the financial sector, economists said. "The reason why China has decided to launch a financial stability and development committee is that it could shore up weak links in supervision and strengthen comprehensive coordination," said Lian Ping, chief economist with Bank of Communications.

Given a fragmented and segmentary system might leave blind spots in supervision and lead to financial arbitrage, the introduction of the committee will help improve the effectiveness of regulation and address regulation challenges brought by increasingly mixed financial services, Lian said.

The financial stability and development committee should be an authoritative decision-making body rather than an advisory body, according to Lian.