Second, apart from the four state-owned asset management companies, private and foreign participants should be encouraged to enter this market to promote competition. Third, internal reforms should be carried out in the four state-owned asset management companies to enable them to operate on real commercial basis with hard budget constraints.
This refers to banks which are so big that their failure could bring down the entire financial system. Just think about what happened when Lehman Brothers failed in September 2008. What we need are restructuring mechanisms that will allow such banks to fail without disrupting the whole system. At the conceptual level, we have already made good progress.