China is likely to set up a new commission to coordinate the supervision of the financial services sector as traditional banking, insurance companies, securities dealers and other investment companies have become increasingly intertwined on the capital and currency markets.

The Xinhua-run China Securities Journal made the prediction in a report Wednesday.

The national finance working conference, to be held in the second half of the year, will focus on inter-ministry coordination of financial supervision, and establishing a coordinating organization, the newspaper said.

China's insurance companies and banks have become increasingly involved in other financial dealing outside their traditional services. China Life Insurance Company Limited, the nation's biggest life insurer, has become the second largest shareholder of CITIC Securities Company, a major stock dealer in the country. China Life is also seeking a stake in Agricultural Bank of China.

Ping An Insurance Company has successfully acquired 89.24 percent of the shares of Shenzhen Commercial Bank, and the China Construction Bank and the Bank of Communications are trying to establish insurance companies on the mainland, the newspaper said.

A report concerning the new commission is likely to be submitted to the State Council in late August, the paper said.

A new commission would be a better watchdog over the banking, securities and insurance industries, and enhance supervision over mixed service companies, it said.

China's banking, securities and insurance industry is now supervised by the China Banking Regulatory Commission (CBRC), the China Securities Regulatory Commission (CSRC) and the China Insurance Regulatory Commission (CIRC).

The creation of a new financial product may require the approval of all three regulatory commissions, it said.

As China is gradually opening its financial market according to commitments by to the World Trade Organization, the country's financial industry has been developing at an accelerated pace in recent years.

Source: Xinhua