We have a high expectation that state-owned banks are capable of taking the lead in endorsing the bank intermediary function, which is currently sub-optimal. Furthermore, we also rely on their power and competence to fund various development projects that are in the interest of many people.
But once liquidity turned into deficit in July 2010, monetary transmission improved. Since October 2009, the CRR has been raised by 100 basis points. The policy repo rate has been raised by a cumulative 375 basis points. As the liquidity in the system transited from surplus to deficit, the effective tightening has been of the order of 525 basis points.