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How to improve the efficiency of local financial regulation: A case study on small-loan companies in Jiangsu Province (No 78, 2015)


By Zhu Hongming, Research Team on "Local Financial Regulation", Research Institute of Finance of DRC

Research Report No 78, 2015 (Total 4763)


In order to promote the sound development of financial institutions, prevent and relieve regional financial risks, the efficiency of local financial regulation must be improved continuously. In exercising regulation on small-loan companies, local financial regulatory authorities in Jiangsu Province have taken Jinnong Company as a pilot project and conducted quite a few valuable regulatory innovations, which have solved some of the outstanding problems relating to local financial regulation to a certain extent. First, based on Jinnong Company, efforts have been made to boost information construction of regulations to address the issue of insufficient regulatory resources. Second, to bring into play the additional regulatory function of Jinnong Company to deal with the issues of insufficient regulatory resources, low specialization and inadequate capacity. And third, relying on innovative business, business access standards are raised to offset the insufficient regulatory countermeasures. Jiangsu Province's experience on strengthening regulatory innovation could be referred to by other provinces. What is noteworthy is that as local financial regulatory innovations cannot give effect to a permanent cure for the problem of inadequate regulatory countermeasures, the promoting of local financial regulatory efficiency still rests upon the advance of local financial regulatory legislation.