|Girish Shetti |||Mar 14, 2016 12:40 AM EDT|
(Photo : Getty Images) The new head of the CSRC Lou Shiyu has defended the controversial policies of his predecessor.
In his first ever press conference, China's newly-appointed stock market chief has tried to calm nervous investors as he pledged sustained government support for the country's plummeting stock markets. Liu Shiyu, the new chairman of China Securities and Regulatory Commission (CSRC), also promised timely intervention should market volatility return back to stock markets again.
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Liu, who was appointed to head the CSRC just last month, vehemently defended government's decisive policies under his predecessor Xiao Gang's tenure. This is despite the fact that Xiao Gang's controversial 'circuit breaker' method ended up wiping out $5 trillion from the market.
"At a time of such tightened-up liquidity, how could (the government) not have taken decisive actions," Liu said, adding that if government had not intervened, then losses would have been much higher.
"Under such a situation of panic, if we didn't act decisively, could the impact not be huge?" Liu asked while defending the government's policies. "It would certainly have led to even greater panic and systemic financial risks."
Speaking specifically about circuit break method, Liu said that Chinese market would not be ready for such a method for years to come, but stated that there are 'lessons to be learnt' from circuit breaker's disastrous failure in January this year.
When asked about pending decision over an IPO-registration system, Liu said such a system was necessary to allow companies to go public in a shorter time. However, he said it will take long time to implement the system.
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