Financial Stability Law Draft for Comment

Securities Times Network News, the People’s Bank of China issued the “Financial Stability Law of the People’s Republic of China (Draft for Comment)”, the main contents include: compacting all parties’ responsibilities for financial risk prevention, resolution and disposal. Preliminary disposal practice shows that some small and medium-sized financial institutions have failed corporate governance, extensive business models, and some shareholders and actual controllers abuse their control rights and illegally occupy financial institutions’ funds. These are the important reasons for the occurrence of financial risks. The supervisory responsibilities of financial supervisory authorities also need to be further implemented and strengthened. The Financial Stability Law consolidates the main responsibilities of financial institutions and their major shareholders and actual controllers, strengthens financial institutions’ prudential operation obligations, and strengthens access and regulatory requirements for major shareholders and actual controllers. Consolidate the territorial and stability maintenance responsibilities of local governments, and proactively resolve regional financial risks in a timely manner. Consolidate the supervisory responsibilities of the financial regulatory authorities, earnestly perform the financial risk prevention and control responsibilities in the industry, and strictly prevent, correct and deal with risks in a timely manner. The People’s Bank of China plays the role of the lender of last resort and maintains the bottom line of preventing systemic financial risks.