Bankers:Financial Regulatory System Needs Reform

Bankers from both China and the rest of the world are calling for a reform of the international financial regulatory system in order to deal with the economic woes and prevent new risks.

He Fei has more.

The global financial crisis has had a great impact on world economies, forcing countries to launch massive economic stimulus packages.

Now more countries are facing the prospect of high inflation as the stimulus measures cause excessive liquidity.

Addressing an Asia Development Bank's conference in Beijing, Cai E'sheng, vice chairman of the China Banking Regulatory Commission, says in the face of the complex financial situation, China will continue to reform its banking regulatory system.

"First, (we will) strengthen reform and inspection on banking and financial institutions, perfecting corporate governing structure in the banking system. Second, (we will) continue to conduct strict cross-industry and cross-border supervision, moderately separate banking systems and capital markets, so as to prevent the spread of financial risks."

He also urged Chinese banks to ensure financial stability when innovating their businesses, and prevent the risks of bad assets.

Klaus Gerhaeusser, Director General of Asian Development Bank's East Asia Department says banks need to look beyond the crisis and focus on long-term issues related to the reform of financial regulation and supervision.

"The crisis has taught us lessons about the need for reexamining, among others, the regulatory framework for bank capital. Regulation and supervision of liquidity management, strengthening governance and transparency, and coordinating national regulatory and supervisory efforts to strengthen market integrity, build consumer and investor confidence in the region's financial systems and thereby safeguard the financial stability."

In the mean time, participants agree one country alone could not succeed in the combat against financial crisis. It is the same that the reform of international financial regulatory system also requires enhanced global cooperation.

He Fei CRI News.