(Yicai Global) July 4 -- The establishment of a new committee will help China to avoid the overuse of across-the-board deleveraging measures and to focus on a more structural approach, says a People's Bank of China advisor.
"Compared with mechanisms in the past, the Financial Stability and Development Committee has a stronger coordination capacity, more authority, and more comprehensive participation," Shanghai Securities News reported PBOC Monetary Policy Committee Member Ma Jun as saying.
The Financial Stability and Development Committee under China's cabinet convened its first meeting on July 2, looking at the key work of promoting financial reform and opening up while keeping monetary policy stable and neutral. The group also aims to maintain reasonable liquidity in the financial market while ensuring that supervision and control mechanisms are working at the correct level.
"The committee helps to avoid situations in which different regulators act separately and artificially, leading to excessive liquidity tightening and even market panic as a result of the superposition of regulation," Ma added.
The meeting also analyzed the current economic and financial situation and looked over a three-year plan of action proposed by the Office of Financial Stability and Development Committee to combat major risks.
Editor: William Clegg