For a seminal reference on the benefits of flexible exchange rates, see Friedman, M. (1953), “The Case for Flexible Exchange Rates”, in Friedman M., Essays in Positive Economics. Chicago, University of Chicago Press, pp. 157–203. 2  BIS central bankers’ speeches  China’s financial challenges China has made significant progress in fostering its financial system.
Key advances include bank restructuring, increased foreign participation in financial institutions, the listing of banks on domestic and foreign stock markets, the development of debt, stock, and derivatives markets, the liberalization of lending interest rates, the initial opening of the capital account, and a stronger regulatory and supervisory framework.