Vastavam web: Guo Shuqing, head of China’s new regulator for the banking and insurance sectors, can be expected to also be installed soon in the role of Communist Party chief of the People’s Bank of China (PBOC), two sources with knowledge of the matter said on Sunday.Unlike other central banks in the world, the PBOC is not fully independent. While its governor can be expected to manage the bank’s daily operations, its party chief is the ultimate boss.
The PBOC’s new governor, Yi Gang, only took over earlier this month. Yi’s predecessor, Zhou Xiaochuan, served as both the bank’s governor and party chief for 15 years. Yi is widely regarded as wielding far less political clout than Zhou.Sources familiar with the matter say Yi, a U.S.-educated economist and previously Zhou’s right-hand man, was likely to manage the PBOC’s day-to-day operations.Guo’s strong political and financial background will enable him to effectively coordinate policy between the PBOC and the new banking and insurance regulator, the first two sources said.
The new PBOC party chief has a reputation as a heavyweight reformer.As head of China’s previous banking regulator he started what was widely dubbed a “regulatory windstorm”, implementing a flurry of new measures to tackle the sector’s most complex problems, from shadow banking and regulatory arbitrage to hidden bad debt.