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China's new regulator could tighten bank squeeze


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By Christopher Beddor

(The author is a Reuters Breakingviews columnist.)

WASHINGTON, Dec 7 (Reuters Breakingviews) - Most appointments to China's financial regulatory agencies are rightly greeted with a yawn. The naming of Zhou Liang as vice chairman of the China Banking Regulatory Commission, made public on Thursday, is different. Zhou comes from the camp of the former anti-corruption czar, Wang Qishan. At a time when the watchdog and other regulators are squeezing financial institutions, his presence is likely to ratchet the pressure.

It's little surprise that at least one of Wang's lieutenants is moving into a financial watchdog. The graft buster increasingly focused on the financial sector during his last months on the job, taking on titans such as Wu Xiaohui, head of Anbang Insurance, and Xiang Junbo, chairman of the insurance regulator. Others in his camp have been floated for top posts, such as Yang Xiaochao, another top CCDI official, to take over Xiang's former role.

Zhou may seek to finish the cleanout, and perhaps institutionalize the anti-corruption campaign inside regulatory agencies. Throughout his involvement in finance - especially his time fighting crises in Guangdong - Wang has been willing to take on powerful bankers and their regulatory patrons.

Zhou's appointment will likely add fuel to an already raging fire. The central bank is leading a charge to root out financial chicanery this year. The CBRC plays supporting technical and enforcement roles. On Wednesday, it released draft regulations on liquidity management designed in part to wean banks off risky short-term funding. It has also slapped nearly 1,500 financial institutions with a total 667 million yuan ($101 million) worth of fines in the year to October, including last week on China Minsheng Bank,, the country's biggest private bank. Wang may have formally stepped down, but Chinese banks and their investors should assume his influence remains strong.

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CONTEXT NEWS

- The China Banking Regulatory Commission said on Dec. 7 that Zhou Liang had been appointed vice chairman in November. Zhou was previously head of the organizational department of the Central Commission for Discipline Inspection, the Chinese Communist Party's anti-corruption agency. He served as a longtime secretary for Wang Qishan, the country's former anti-corruption czar, according to media reports.

- The South China Morning Post reported that Wang is being allowed to continue attending meetings of the Politburo Standing Committee, China's highest political organ. He formally stepped down from the body in October.

- For previous columns by the author, Reuters customers can click on

CBRC official biography of Zhou Liang(graphic).




This article appears in: World Markets , Stocks , Economy , Banking and Loans , Technology


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