We in Europe are confident that the Chinese authorities are well aware of these risks and of the need to pursue financial reforms and economic policies that foster efficient and sustainable economic performance. To this end, exchange rate flexibility is an essential element of an appropriate policy strategy.
As the country’s prime financial regulatory and supervisory authority, I give you the assurance that the Central Bank is prepared to take early and decisive corrective actions to prevent a build-up of unmitigated risks in individual financial institutions, or in the financial system as a whole. There are several ways in which the Central Bank promotes financial stability.