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The Current Performance and Problems of Local Financial Supervision in China
2016-08-25
By Chen Daofu
This paper mainly discusses the current performance and problems of local financial supervision in China.
The current performance of local financial supervision in China is as follows.
Firstly, financial supervision responsibilities and organizational structures vary from province to province. The facts are as follows. 1. The supervisory powers of local financial supervision lie in multiple departments. 2. Financial offices in different places share diversified responsibilities. 3. The organizational structures of local offices of finance are different.
Secondly, the resources for local financial supervision are limited. For instance, 1. The subjects of supervision grow in number rapidly with insufficient personnel, technical expertise and financial support. 2. Local financial regulatory resources are mainly concentrated at provincial and municipal levels, and regulatory gap exists at the county level. 3. Financial supervision lacks follow-up supervisory measures and law enforcement powers.
Thirdly, the provincial and city offices of finance focus on establishing risk prevention system of small loans companies such as the establishment of data monitoring system and mobile support system for small loan companies as well as the joint meeting system for offices of finance in different regions.
The major problems of the current local financial supervision include: firstly, the duties of local economic and financial development, financial regulation and financial risk bailout are inconsistent with each other. The primary functions of local offices of finance are financing and attracting investment, thus the focus is laid on the development, but not supervision. Secondly, local financial supervision has attached too much emphasis on review and approval to the neglect of daily management, resulting in overlapping supervision and regulation gaps. Due to the restraints of supervisory capacity and limited powers, the performance of local offices of finance in terms of daily supervision is not that sound. Besides, the vertical central supervision and management and limited supervisory powers of local offices of finance have led to overlapping supervision and regulation gaps. Thirdly, uncoordinated reforms restrict the efficiency of local financial supervision.
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