Recently there is a buzzword called “macro-prudence.” We know that the requirement of establishing two-pillar regulatory framework of monetary and macro-prudential policies has been proposed in the report to the 19th National Congress of the CPC. I have just explained the goal, transmission and tools of monetary policy. Then I’d like to explain what is macro-prudential policy.
It is mainly aimed at ensuring financial stability and forestalling systemic risks and characterized by counter-cyclical adjustments. The monetary policy can practice both quantity and price control. Quantity control is a simple tool, as quantity can be specified clearly.