As regard the banking supervision, SBP is working towards introduction of consolidated supervision whereby it will not be monitoring banks as a stand-alone entity but rather as part of the entire banking group. This will help to evaluate the strength of the entire group and to mitigate risks arising from group companies.
This is because interest rate instruments can affect not only bank lending but also overall financial activity. Window guidance was finally abolished in 1991. Implications for China In China, financial liberalization has made progress steadily in recent years. The size of the short-term money market and the bond market has been increasing.