The string of missteps, both mental and policy related, have finally caught up with China’s top securities regulator, Xiao Gang, who announced he will be relinquishing his role as the Head of the China Securities Regulatory Commission (CSRC), following several months of market convulsions in the country.
The worst kept secret across the financial markets since last summer has been the rampant volatility afflicting China’s equity markets, characterized by seismic swings in the Shanghai index and the country’s hastily conceived measures to abate the selling.
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Proponents for a more stable financial regime were given welcome news Friday, after Xiao Gang’s announced departure, along with his subsequent replacement by Liu Shiyu, the acting Chairman of the Agricultural Bank of China – Mr. Liu is also a former Deputy Governor of the Chinese central bank.
Mr. Xiao first ascended to the role as the Head of the CSRC nearly three years ago, however it has been the past seven months that have defined his tenure. He was the primary architect behind the use of circuit breakers across Chinese indices, in essence a safety mechanism that automatically halts trading when benchmark indexes fall too quickly. Since the summer, Xiao has drawn heavy criticism for exacerbating the damages to several Chinese indices, which have only recently begun to abstain from volatile swings.
Mr. Xiao was originally named as Chairman of CSRC back in March 2013, having since embarked on a mandate to bring increased transparency to China’s markets and at the securities commission itself.