By Sun Guofeng
Collected the following for the 1st time in English, this finished e-book, written by way of an skilled insider aware about the interior workings of China's full of life monetary reforms, examines China's most crucial markets (money, bonds, foreign currencies, and inventory) and the guidelines that keep watch over them.
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Additional resources for Financial Reforms in Modern China: A Frontbencher’s Perspective
A self-regulatory organization for banks will be established to strengthen the self-regulation of banks. The regulation will be stringent, and any institutions in violation of the relevant rules of the PBC will be resolutely investigated and punished so as to maintain the market order and create a safe and standardized market environment. In addition, the self-disciplinary system of interbank market members must be raised and the members of the national interbank lending market must be gathered to sign the Master Agreement for Interbank Bond Repo.
The PBC has coordinated policy banks to issue bonds under market-based procedures, adding more trading vehicles to the market. 18 ● Financial Reforms in Modern China The PBC then approved the spot bond trading and repo of policy financial bonds issued under market-based procedures in the interbank bond market, which greatly enriched the trading instruments of the market. 8 billion. 4. The PBC improved market trading rules, enhanced market operation efficiency, and guarded against risks. In early 1998, the PBC laid out a principle for bond trading, which dictates that bond transactions, contracts, and settlement orders must be matched to effectively mitigate settlement risks.
The money market rates mainly include interbank lending rate and bond repo rate, which both reflect the liquidity status of financial institutions. Since June 1996, the PBC has lifted the restriction on the money market rates and hence made them fully market-oriented. In 1998, the central bank, on the one hand, injected more liquidity into financial institutions by appropriate monetary policy and indirectly led to the downward movement of the money market rates; on the other hand, besides the adjustment of interest rates for deposits, loans, and reserve rates for three times, the PBC also flexibly regulated the money market rates and sent monetary policy signals through open market operations and various monetary policy tools.
Financial Reforms in Modern China: A Frontbencher’s Perspective by Sun Guofeng