CBRC official chastises Western regulators

A senior Chinese banking regulator said Western governments must improve their oversight of financial markets and improve cross-border regulatory cooperation in order to stave off future global financial crises. In an interview with the Financial Times, Liao Min, director-general and acting head of the general office of the China Banking Regulatory Commission (CBRC), said Western regulators need to revise their views on the relationship between markets and the government. "In practice, they tend to overestimate the power of the market and overlook the regulatory role of the government and this warped conception is at the root of the subprime crisis," he said. Liao said the resulting downturn in the US economy and the decline in the US dollar have swelled the flow of hot money entering China and also contributed to asset bubbles and rising inflation.