BEIJING (Reuters) - China is set to create an agency led by the central bank to coordinate financial supervision, without changing the roles of existing industry watchdogs, the cabinet said on Tuesday.
The State Council said in its approval of the proposal from the People's Bank of China (PBOC) that the new office will coordinate China's monetary policies and financial regulations, maintain financial stability and reduce systemic risks.
The agency would report to the cabinet and its creation is not expected to affect the role of current supervisors as it would not be a policy maker.
This is contrary to market expectations, which have long speculated that China would create a super-agency for financial regulation to cut bureaucratic infighting and quicken reforms.
For example, the development of China's bond market is undermined by turf wars between three different regulators.
The central bank governs bond sales in the inter-bank market, the China Securities Regulatory Commission (CSRC) oversees bonds issued by listed companies while the National Development and Reform Commission (NDRC) approves bond issuance by non-public firms.
The country's current main financial supervisors include the PBOC, CSRC, the China Banking Regulatory Commission, the China Insurance Regulatory Commission and the State Administration of Foreign Exchange.
The new agency can also invite the NDRC, China's most powerful economic planner, and the Ministry of Finance if needed to its regular quarterly meetings and extraordinary meetings, the government said in a statement.
It will also increase oversight of cross-asset financial products and innovations, improve information sharing and set up an accounting system across financial sectors.
The statement was made public on Tuesday but was dated Aug 15.
Reporting by Langi Chiang and Koh Gui Qing; Editing by Kim Coghill