ABSTRACT
Chapter 6 (2008–17) shows how China’s leaders sought to mitigate new forms of risk in the banking sector which emerged after the global financial crisis. Regulators enhanced supervision and strengthened regulation, improved transparency, developed firewalls and increased loan provisions. The party reduced compensation of banking officials and uncovered cases of corruption. Interest rate and deposit insurance reforms improved capital allocation and reduced moral hazard. The approach was in contrast to the culture of deregulation and unbridled financial innovation that was ultimately behind the global financial crisis. China’s officials advanced their ideas on how to establish a more stable global financial system through institutions such as the BCBS and the FSB.
