Macro-prudential policy – two “dos” and one “don’t” The recent financial crisis, as well as the Great Moderation leading up to the crisis, brought to bitter recognition the gap between our macroeconomic and micro-prudential policies. Thus, macro-prudential policy has come into the spotlight as something that would fill this gap.
With these efforts, a solid theoretical foundation has been laid for future development of the financial discipline and the reform of China’s financial system. However, we shall be more aware that China’s financial system may face a series of challenges arising from financial globalization and China’s WTO accession.