The People's Bank of China recently published the "China Financial Stability Report (2008)." The report holds that China's financial reform and development has encountered a new situation: some international and domestic factors are having an impact on financial stability. The report draws our attention to nine risks.
First, international economic and financial changes need to be monitored to prevent the infectious risk caused by international financial market turbulence. Second, it is important to improve macroeconomic regulation and control to prevent risk caused by an unreasonable economic structure. Third, we should improve the international balance of payments situation and establish a sound early warning mechanism while monitoring cross-border capital flow. Fourth, it is necessary to effectively prevent prices from rising too fast. Fifth, we should improve the operation of the market mechanism, and prevent the risk of sharp asset price fluctuation. Sixth, the bond market should be vigorously developed and the financing structure effectively improved. Seventh, it is necessary to accelerate financial reform and innovation, and strengthen risk management and competitiveness among financial institutions. Eighth, we should strengthen investment risk education and enhance self-protection among investors. And ninth, financial supervision should be strengthened and the financial security net should be coordinated, established and improved.
By People's Daily Online
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