(Yicai Global) Feb. 5 -- China's central bank has set up a new division to monitor and handle systemic financial risks, according to a government statement issued over the weekend.
The new Macro-prudential Management Bureau will take over some responsibilities of the Monetary Policy II Department, which was founded in 2008 and is now disbanded, the State Commission Office of Public Sectors Reform said on Feb. 2.
The new bureau will be responsible for formulating macro-prudential policies, assessing financial agencies, drafting rules and regulations, and monitoring financial risks. It will also assess foreign exchange policies and promote the yuan's cross-border transactions.
Authorities said the People's Bank of China should take a leading role in establishing macro-prudential management framework, drafting important laws in the finance industry, and improving ground rules for protecting financial consumers. In terms of functions, the PBOC needs to strengthen its responsibility in macro-prudential management and stay alert for financial risks.
The new bureau will represent two main tools for the PBOC's goal of maintaining financial stability, Yin Zhentao, deputy director of the Research Center for Financial Law & Regulation at the Chinese Academy of Social Sciences, told Yicai Global, adding that the PBOC's regulatory role will be further strengthened with the new bureau.
The statement also mentioned that the PBOC would adjust the duties of its departments and personnel to enhance efficiency and service quality.