Official representatives of the People’s Bank of China have called for a change in the rules of financial regulation in the direction of tightening.

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In the publication of the central bank of China Finance, three officials stated the need to speed up the process of adopting a law on financial stability. They also noted that against the background of the banking crisis in Silicon Valley, changes should be made to other regulations to reduce the level of financial risks.

The report of the People’s Bank of China says that the country should introduce its deposit insurance system. According to the authors of this report, the system will quickly solve the problems of creditors and contribute to the prevention of systemic risks.

The report focuses on the fact that Chinese commercial banks are currently in a normal state in terms of their financial situation and related capabilities, but there is a need to consolidate capital reserves under the leadership of the country’s government. Experts note that consolidation will make sure that there are sufficient resources to respond promptly to possible risks.

The call for stricter financial regulation was announced a few days after a couple of Chinese officials took the initiative to introduce stricter control measures in the field of cryptocurrencies.

Xuan Changneng, deputy governor of the People’s Bank of China, said last Friday, March 31, that regulators should create a favorable environment for innovation, but there should also be respect for existing rules and preliminary testing of new technologies.

The deputy governor of the People’s Bank of China also noted that the regulatory philosophy, technology, and capabilities must be improved to ensure that innovation is not carried out at the expense of financial stability.

Liao Ming, China’s deputy finance minister, argues that the country should actively participate in international cooperation and the standards harmonization process.

In China, statements about the need to tighten financial supervision began to sound after officials in the United States began calling for stricter measures to regulate the country’s banking system. The Joe Biden administration, according to preliminary data, is considering several measures of appropriate orientation, including the restoration of parts of the Dodd-Frank act that were repealed during the presidency of Donald Trump.

Last week, US lawmakers also proposed a law on compensation for losses to the heads of bankrupt banks, which would require federal regulators to return compensation.

As we have reported earlier, Fidelity International Preps First Mutual Fund in China.