Arab Today, arab today china to replace securities regulator head
Last Updated : GMT 23:49:16
Arab Today, arab today
Arab Today, arab today

To reassure global investors

China to replace securities regulator head

Arab Today, arab today

Arab Today, arab today China to replace securities regulator head

In mid-2015, Xiao Gang oversaw a rout on China's exchanges
Beijing - Arab Today

China will replace the head of its securities regulator, state media reported on Saturday, as the country struggles to reassure global investors that it can effectively manage stock markets that have experienced massive turmoil.

Xiao Gang, who was in charge during last year's crash, will be "dismissed" from his post at the China Securities Regulatory Commission and replaced by Liu Shiyu, chairman of the Agricultural Bank of China, the official Xinhua news agency said.

As growth slows and stocks deflate, capital has flooded out of the country, leaving Beijing desperate to win back waning confidence in the once vaunted economic oversight that has made China the world's second-largest economy.

Chinese stocks slumped 23 percent in January, their poorest month since the depths of the global financial crisis in 2008, a performance that made the Shanghai exchange the world's worst-performing major market.

A series of moves intended to smooth dramatic swings in stock prices that began last June instead created panic, raising questions about Beijing's ability to manage a critical period of economic transition.
Xiao, 57, took over as chairman of the China Securities Regulatory Commission in March 2013.

He spent most of his career in China's banking system, including the central bank and the state-owned Bank of China, one of the country's "Big Four", which he headed for 10 years before moving to the CSRC.

He was in charge of overseeing the market in mid-2015 when the benchmark Shanghai index plummeted by almost a third, wiping off trillions of dollars and jolting global markets.

The plunge was triggered when regulators changed the rules on traders' use of borrowed money, bursting a debt-fuelled bubble that had seen Shanghai's benchmark index surge 150 percent in the year to mid-June.

- 'Fools make decisions' -

Calls for Xiao's departure, heard regularly since the debacle, heated up early in January after the CSRC's deployment of a "circuit breaker" closed the Shanghai and Shenzhen exchanges early twice in four days before it was scrapped.
"Somebody needed to bear responsibility after the suspension of the circuit-breaker system," Zheng Chunming, a Shanghai-based analyst at Capital Securities Corp., told Bloomberg News.

At the time, many angry investors took to the Twitter-like Sina Weibo to condemn Xiao's abilities as head of the regulator.

One user wrote: "(I) strongly urge Xiao Gang to step down. The stock market's management is a mess and market disasters keep happening... Xiao Gang's ability is poor and he is incompetent."

Another wrote: "I have never heard that the index could fall to a stop in five minutes. Why does China always let the fools make decisions?"

Xiao himself revealed during a 2012 television interview that at school he preferred arts subjects such as writing poetry to mathematics. He also said he "didn't choose to learn finance" at college.

Some financial analysts took a kinder view of his accomplishments.

He did "a lot of work in market monitoring, increased market transparency and cracked down on market irregularities", Li Daxiao, chief analyst at Yingda Securities, told AFP.

Nevertheless, he welcomed the news of the replacement, saying "the market has new hope now".

- Favourable turn -

Xiao's successor, Liu, has spent most of his career in banking. He served as a vice-governor of the People's Bank of China, the central bank, before being tapped as chairman of the Agricultural Bank of China, the country's third-largest lender.

With his entrance, “people may feel there will be some new ideas or a favourable turn for the market now. The market could rise for a short time after this", Qian Qimin, a broker with the Shenwan Hong Yuan Group, told AFP.

But on Weibo Saturday, commentators, using a play on the new appointee's name, wondered if Liu's tenure would bring a "bull market" or leave behind a "dead fish".

In recent years, Agricultural Bank has experienced its own share of troubles.

In December the bank's president resigned for "personal reasons" amid reports that he had been questioned in connection with a corruption investigation.

In January, Chinese media reported that two junior employees at a Beijing branch of the bank stole bills worth 3.9 billion yuan ($600 million), sold them, then used the proceeds to invest in the stock market -- sustaining huge losses during last year's crash.
Source :AFP

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Arab Today, arab today china to replace securities regulator head Arab Today, arab today china to replace securities regulator head

 



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