China to name reformer Guo Shuqing as central bank party chief: Sources

Guo Shuqing, chairman of the China Banking Regulatory Commission, speaks during a news conference at the Great Hall of the People during the 19th National Congress of the Chinese Communist Party in Beijing, China, on Oct 19, 2017.
Guo Shuqing, chairman of the China Banking Regulatory Commission, speaks during a news conference at the Great Hall of the People during the 19th National Congress of the Chinese Communist Party in Beijing, China, on Oct 19, 2017. PHOTO: BLOOMBERG

BEIJING (REUTERS) - Guo Shuqing, head of China's new regulator for the banking and insurance sectors, is expected to also be installed soon in the role of Communist Party chief of the People's Bank of China (PBOC), two sources said on Sunday (March 25).

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.

An announcement on the appointment of Guo - who became chairman of the China Banking and Insurance Regulatory Commission only last week - to the position in the central bank is likely to be made this coming week, a third source told Reuters.

The PBOC's new governor, Yi Gang, took over only 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 US-educated economist and previously Zhou's right-hand man, was likely to manage the PBOC's day-to-day operations.

The New York Times, which earlier on Sunday reported that Guo had been appointed to the top PBOC post, said he would outrank Yi, noting that in the Chinese system the governor is responsible for running the central bank, but the party chief has the final say on strategic decisions.

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.

Guo 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.

During his 17 months as chief stock market regulator from 2011 to 2013, Guo drew up 80 new policies, fought widespread insider trading, advocated reform of the initial public offerings system, promoted the delisting of loss-making firms, and boosted the participation of foreign investors.

Guo previously also served as a deputy central bank governor, the top foreign exchange regulator, and a governor of Shandong province.