Financial Linkages to the Real Economy My third question concerns a key issue for monetary policy and macroeconomics that is less directly addressed by this conference: How does the financial sector interact with the broader economy? In light of the housing bubble and subsequent events, policymakers clearly need to better understand what kinds of developments contribute to financial crises.
In China, many financial institutions have begun to pay attention to risk control only in recent years. Thus, risk control is rather weak. In many large financial institutions abroad, risk control department is very important and powerful, so much as that the Risk Control Officer is in a position to reject what the President has said.