Yin Zhongqing, the deputy director of the Financial and Economic Affairs Committee of the National People's Congress of China, has told reporters that it is time to merge China's four financial regulators, but patriotic arrogance might be a stumbling-block if this comes to pass.

Yin envisioned a merger between the China Banking Regulatory Commission (CBRC, estd 2003), the China Insurance Regulatory Commission (CIRC, estd 1998), the China Securities Regulatory Commission (CSRC, estd 1992) and the the People's Bank of China (PBC, estd 1983). Some commentators are taking this as a sign that it is already official policy.

Yin's reasons for wanting a merger are fairly identical to the arguments behind the formation of the UK's old Financial Services Authority. 'Convergence,' the blurring of lines between insurance, banking, securities, advice and other segments of the financial services industry, is at the top of the list. Yin was also worried about systemic risk, something that he thought was not properly tackled by four disjointed regulators that could only 'micro-manage' it. Once again, although disastrously, this was another objective of the FSA's when it was formed.

As with the old Securities and Futures Authority, Personal Investments Authority, Securities and Investments Board, Investment Managers' Regulatory Organisation and Bank of England regulatory arm, today's Chinese regulatory bodies take very different approaches to supervision and have their own internal cultures and cadres. A merger along the lines of the FSA will not be without its difficulties, but many regulators around the world have achieved such a merger quite smoothly, thanks in many cases to the FSA's example.

China, however, might decide to ignore all the precedents and attempt a merger without asking any other regulators around the world about how it is done. Indeed, Yin seemed to be pretending not to know that any other regulatory mergers had ever taken place elsewhere in the world. His pronouncement that such a merger "is without precedent" sounds depressingly like a refusal to believe that other nations have anything to offer China by way of regulatory experience, solely because they are other nations. If this is the case, any future plans for a merger might end in a quagmire.