Beijing, 20 February (EFE) .- In an attempt to end the volatility of the markets, the Chinese government has dismissed the president of the regulatory market of China, Xiao Gang, after the crisis of last summer bags and turbulence earlier this year.
the authorities announced today by Xinhua, Liu Shiyu, current president Agricultural Bank, has been appointed chairman of the Regulatory Commission Securities Market of China (CRMV) to replace Xiao, who had been in recent months central harsh criticism for his handling of the crisis.
the decision evidence the pressures that the government is facing, at a time which has been called into question its ability to manage the economy, decelerating after years of double digit growth.
This week, the Chinese Premier Li Keqiang, criticized the work of the regulatory authority by pointing at a meeting of the State Council (executive) that regulators did not respond actively to falls.
According to Li, “the main departments responsible for taking poor decisions” and had some management problems. In this context, the prime minister defended the interventions made by the Government to tackle the problem.
Under the leadership of Xiao, who took office in March 2013, a bubble was created in Chinese Stock Exchanges exploiting ended last summer, with the Shanghai Composite index and Shenzhen coming to lose 40 percent of its value until the authorities intervened.
the bags experienced a period of calm until earlier this year when returned tremors. In late January, the Shanghai Stock Exchange, the main indicator of the Chinese parquet, came to accumulate losses up to a quarter of its value, a behavior that mimicked Shenzhen.
The commission tried to stop the bleeding in summer with measures such as the ban on large shareholders to dispose of their securities for six months or introducing this year, a switch mechanism to halt for 15 minutes the parks in the event that accumulate 5% fall, or terminate your session if they came to 7%.
shortly after being put into operation this January, the mechanism leading to the closing of the parks twice in one week, causing turmoil throughout the world.
the switch caused the opposite effect: led investors to panic. And it decided to suspend it.
had long been speculated output Xiao, an expert of 57 years promoted the campaign against insider trading or reform to approve companies listed companies, and experts say it appears that the failure of the switch mechanism could bring definite date of departure.
Now, the position will be assumed by Liu, an engineer by training who is the current president of one of the four major commercial banks in China, the Agricultural Bank, headed since 2014.
Liu worked in banking since the late 80s and served as deputy governor of the People’s Bank of China (central) for 18 years and the task now will be in charge will not be easy.
the new president of the CRMV manage a market with 100 million individual investors distorted by political intervention, among others.
in addition, their autonomy can be seen limited by the hard scrutiny that the Government of the commission, which has suffered several casualties in recent months of recognized experts is conducting while investigations are announced for alleged corruption against senior officials, as in the case of Vice CRMV, Yao Gang.
Ironically, Liu knows about these problems, as the entity that presides, the Agricultural Bank, is one of the commercial banks hardest hit by corruption.
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