CSRC’s Vice Chairman: Asset Bubble Causes Financial Crisis, Bitcoin Needs to be Strictly Regulated
In the afternoon of January 23 (Beijing Time), Fang Xinghai, the vice chairman of China Securities Regulatory Commission (CSRC), attended the 48th World Economic Forum at Davos, Switzerland. He stated his viewpoints of financial crisis and the financial risk governance in the “The Next Financial Crisis?” Forum.
To discuss the financial bubble, Fang Xinghai mentioned that regulators should always be vigilant especially for those financial risks may arise. “Although the economic situation seems quiet good so far, we cannot be complacent, especially when it comes to financial risks.”
When the topic turned to bitcoin, Fang Xinghai stated that, for China, bitcoin trading is an issue that needs to be strictly regulated as trading activities in this area becomes more and more frequently.
Talking about the financial bubble: regulators should always be vigilant
Regulators should keep vigilant all the time, especially be alert about the risks that finance may occur. Although the economic situation seems quiet good so far, we cannot be complacent, especially when it comes to financial risks. In my point of view, every financial crisis seems to have some correlations with a certain type of asset bubble. Thus, asset bubble can be an answer or a signal of financial crisis and that’s why we should keep an eye on them all the time and govern them as soon as we find any.
To discuss the Bitcoin: governance around bitcoins need to be reinforced
China’s central bank is in charge of the issuance of all kinds of currencies. Making sure every sector generate real value and contributes to the economic is one of CSRC’s duties. We can see that China’s economy is getting huge these days and the market becomes more active. Bitcoin trading is an issue that needs to be strict regulated in China as trading activities becomes more and more frequently.
Fang Xinghai also stated that, China shares some similarities with other countries these days: We also have a lot of debt. Some people starts to worry about once debt becomes excessive, China may go through a time-consuming and painful debt repayment. However, the solution we come up with may be quiet different from other countries. To answer the question of ‘How to clean up the market in China?’ Fang said:”We will use a one-two punch including government intervention and a series of related measures.”