At the beginning of the reform and opening-up, bank employees got the same compensation regardless of their performance, whereas a market-based performance evaluation system and a salary system that linked employees’ remunerations with their contributions were established after the reform. The deepened reform and opening-up has further improved the accounting standard and information disclosure policy, and enhanced external supervision and market discipline.
It is sometimes felt that monetary policy and banking supervision should not be conducted by the same institution to limit the risk of a conflict between policy objectives that could hurt the credibility of monetary policy. Several concerns have been expressed. Thus, the realisation of the reputational and legal risks that supervision entails could damage the credibility of the monetary policy function.