The head of China's securities regulator has been removed from his post after last year's $5-trillion stock market bust, an unprecedented government rescue and a renewed crisis as plunging Chinese equities last month reverberated around the world.
Xiao Gang, 57, a former head of Bank of China, had been chairman of the China Securities Regulatory Commission since March 2013. His exit was announced Saturday by state-owned Xinhua News Agency, which cited a State Council statement. Xiao's replacement is Liu Shiyu, who previously served as chairman of Agricultural Bank of China.
It was on Xiao's watch that unchecked leverage drove a jump in equities from late 2014 before a collapse in June last year that triggered government stock purchases, restrictions on stake sales and a temporary ban on initial public offerings. In an about-face, the CSRC in January scrapped circuit breakers within four days of their introduction as they deepened rather than stabilized the market.
"Somebody needed to bear responsibility after the suspension of the circuit-breaker system," Zheng Chunming, a Shanghai-based analyst at Capital Securities, said before the announcement. Xiao's exit is to show investors that the government is concerned about their losses, Zheng said.
China's Premier Li Keqiang earlier this week became the the most senior official to fault regulators' reaction to the market turmoil, saying at a State Council meeting that they didn't respond actively to declines. Li didn't specify which regulators, and defended the decision to intervene in markets as necessary to head off systemic risks, according to a Beijing News report carried on the government's website.
"The worst thing the CSRC has done is to rescue the market at all costs without thinking about the consequences," said Liu Shengjun, deputy director of the CEIBS Lujiazui Institute of International Finance in Shanghai. "The market rescue is the biggest setback for China's stock market in its 25 years of history. The market system is moving backward."
During Xiao's stint at the helm, another senior CSRC official was one of those caught up in probes across the finance industry by the Communist Party's anti-graft investigators. Yao Gang, a vice-chairman at the regulator, was targeted in November for "alleged serious disciplinary violations," language often used for corruption probes. No comment has been available from Yao.
Xiao Gang, 57, a former head of Bank of China, had been chairman of the China Securities Regulatory Commission since March 2013. His exit was announced Saturday by state-owned Xinhua News Agency, which cited a State Council statement. Xiao's replacement is Liu Shiyu, who previously served as chairman of Agricultural Bank of China.
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It was on Xiao's watch that unchecked leverage drove a jump in equities from late 2014 before a collapse in June last year that triggered government stock purchases, restrictions on stake sales and a temporary ban on initial public offerings. In an about-face, the CSRC in January scrapped circuit breakers within four days of their introduction as they deepened rather than stabilized the market.
"Somebody needed to bear responsibility after the suspension of the circuit-breaker system," Zheng Chunming, a Shanghai-based analyst at Capital Securities, said before the announcement. Xiao's exit is to show investors that the government is concerned about their losses, Zheng said.
China's Premier Li Keqiang earlier this week became the the most senior official to fault regulators' reaction to the market turmoil, saying at a State Council meeting that they didn't respond actively to declines. Li didn't specify which regulators, and defended the decision to intervene in markets as necessary to head off systemic risks, according to a Beijing News report carried on the government's website.
"The worst thing the CSRC has done is to rescue the market at all costs without thinking about the consequences," said Liu Shengjun, deputy director of the CEIBS Lujiazui Institute of International Finance in Shanghai. "The market rescue is the biggest setback for China's stock market in its 25 years of history. The market system is moving backward."
During Xiao's stint at the helm, another senior CSRC official was one of those caught up in probes across the finance industry by the Communist Party's anti-graft investigators. Yao Gang, a vice-chairman at the regulator, was targeted in November for "alleged serious disciplinary violations," language often used for corruption probes. No comment has been available from Yao.