China’s fi nancial watchdogs

China Business Regulatory Commission

The CBRC is the chief regulator for commercial banks and now leading the regulatory charge against shadow banking. Other responsibilities include keeping a lid on local government fi nancing vehicles， rural fi nance and some aspects of interbank lending. The CBRC uses a loan-quota system and loan to deposit ratios to keep a lid on bank lending but the tools are outdated and arduous for banks. Despite leading to spikes in China’s interbank rates， the regulator is reluctant to scrap these controls.

China Securities Regulatory Commission

The CSRC regulates futures， stock exchanges and securities. Yet， since securities fi rms and brokerages became a conduit for banks to funnel funds into the shadow banking sector， it has had a growing stake in regulating off-balancesheet lending. By the end of 2012， close to 90% of assets under management at securities fi rms were tied to banks.

China Insurance Regulatory Commission

The CIRC oversees insurance companies but is taking an increasing role elsewhere in China’s fi nancial sphere. In February， it loosened curbs on insurers’investments into securities； China’s insurers can now invest a larger proportion of their clients’ money in trusts， property and equities. If these investments into shadow banking grow to a more signifi cant scale， the CIRC will have a growing stake in shadow banking， and will push for additional regulatory authority over the industry.

National Development and Reform Commission

The NDRC is the chief economic planner of the country. Endowed with broad powers and responsibilities， it regulated wide swathes of China’s fi nancial markets. Its wide-ranging responsibilities and staff of civil servants， however， made it ill equipped and too slow to respond to rapidly developing fi nancial markets. Within the past three years， the NDRC has lost regulatory privileges to both the CSRC and the CBRC although it has become China’s premier antimonopoly body.

People’s Bank of China

As China’s central bank， PBOC is in charge of monetary policy and holds the levers on the fl ow of cash in the economy. As shadow fi nance and its associated risks have increased， PBOC has grown averse to footing the bill in the event of systemic contagion in the banking system. Central bank policymakers are now some of the most ardent proponents of a crackdown on shadow banking.