Caixin Opinion: The Challenges and Benefits of China’s Latest Financial Stability Legislation

Further integrating financial stability into the rule of law will significantly help with the prevention and management of systemic risks

Over the years, China’s financial sector has grown rapidly, but illicit activities have frequently emerged, exposing how risks have accumulated over time. Photo: VCG

The legislative process for the Financial Stability Law is progressing steadily. At the 10th meeting of the 14th Standing Committee of the National People’s Congress at the end of June, officials will continue to peruse the latest draft of the law, which was first reviewed in December 2022. This legislation aims to fine-tune the systems for preventing, resolving and dealing with financial risks across their entire lifecycle.

The draft law consists of six chapters and 49 articles, primarily establishing mechanisms to coordinate financial stability, strengthening financial risk prevention, improving financial risk resolution mechanisms, clarifying responsibilities and legal liabilities for financial risk management,