The growth of fixed asset investment, broad money and bank credit slowed down quickly in the second quarter of the year, although not without causing serious concern about the possibility of a hard landing. To be sure, the bluntness of administrative measures did lead to inconveniences and perhaps casualties among innocent parties, as cash flow, for a time, dried up for almost everybody rather than the targeted activities. But by and large the measures are working. And about two weeks ago these were interestingly buttressed by increasing interest rates and further liberalisation in the determination of deposits and lending rates. This is another encouraging development in market reform. Let me, lastly, say a few words about the RMB exchange rate. I do not have the privilege of inside knowledge on the subject. The fact of the matter is that there is only a small current account surplus. It is true that there has been large capital inflow lately, as manifested in the rapid build-up of foreign reserves. This was predominantly the result of international political pressures for a more flexible exchange rate. As such it would be a temporary phenomenon, although, with interest rates of the RMB higher than those of the US dollar, there is a significant cost incurred in sterilisation. In so far as the maintenance of a fixed exchange rate is concerned, this is currently not a problem, particularly with capital controls.
www.perjacobsson.org/lectures/101213.pdf 4 See Kydland, F. and E. Prescott (1977) “Rules rather than discretion: The inconsistency of optimal plans”,  Journal of Political Economy, 85(3), pp. 473–92 and Alesina, A. and L. Summers (1993) “Central bank independence and macroeconomic performance: Some comparative evidence”, Journal of Money, Credit and Banking 25(2), pp. 151–162. 5 See Nicholas Bloom (2009), “The Impact of Uncertainty Shock”, Econometrica, Volume77, Issue3, Pages 623–  685 6 The final version is scheduled for publication on 22 February 2019. 7 Press conference given by Mario Draghi, 24 January 2019. 8 “ECB Monetary Policy and the Resilience of the Eurozone”, Columbia University, New York, 19 April 2017,  speech by François Villeroy de Galhau, Governor of the Banque de France. 9 Address given by Mário Soares on the European Community of the future (Lisbon, 19 October 1990). 6/6  BIS central bankers' speeches