China is considering bringing together its banking, insurance and securities regulators into a single super-commission, sources said, following the summer’s stock market crash that was blamed in part on poor inter-agency coordination. China’s stock markets dropped by more than 40 per cent between mid-June and August, forcing Beijing to take unprecedented measures to prevent a wider panic, embarrassing the government and delaying planned improvements to nascent derivatives and futures markets.

The uncoordinated policy response prompted senior leadership to begin internal discussions about merging the three main financial regulators, part of a broader goal to reform China’s markets, said a senior official at one of the regulators involved in the process. A financial services executive who is in frequent contact with regulators, and a source close to the senior leadership confirmed discussions were taking place.

Industry insiders have expected a shake-up in the regulatory apparatus in the months following the crash, and sources said that Beijing had already begun exploring a replacement for China Securities Regulatory Commission (CSRC) head Xiao Gang.

The three regulatory agencies that may be merged are the CSRC, the China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission (CIRC). Beijing is looking at Britain’s regulatory set-up as a model, among other options, the senior regulator source said. Britain reformed its regulation after the global financial crisis, handing the Bank of England more control over the financial system, partly in the hope of avoiding future bank failures.