China's new financial oversight body vows to fend off risks

BEIJING (Reuters) - China has established a new Financial Stability and Development Committee to improve supervision coordination, Xinhua news agency said, in the latest effort to ward off systemic risks in the world’s second-largest economy.

Beijing is trying to reduce financial risks by containing rising debt and defusing housing bubbles amid fears they could derail the economy if not handled well.

President Xi Jinping said in July that the new financial oversight body would be set up under the cabinet, and that the People’s Bank of China (PBOC) will take on a bigger role in managing risks in the financial market.

“We will strengthen financial supervision coordination and increase our ability to coordinate and prevent risks,” Xinhua quoted vice premier Ma Kai, who heads the committee, as saying.

The committee will coordinate monetary policy, and financial supervision and will also be responsible for formulating key policies to forestall systemic financial risks and reviewing financial reform and development, Xinhua said.

China will maintain prudent monetary policy and strengthen financial supervision, Xinhua quoted Ma as saying.

Reporting by Beijing Monitoring Desk and Kevin Yao; Editing by Nick Macfie/Mark Heinrich