Financial Deepening and Financial Stability

David Daokui Li (), Jinjian Shi (), Dapeng Chen (), Lin Lu (), Xushuo Wang () and Kangyi Liu ()
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David Daokui Li: An Academic Center for Chinese Economic Practice and Thinking (ACCEPT), Tsinghua University
Jinjian Shi: China Institute of Finance and Capital Markets,China Securities Regulatory Commission (CSRC)
Dapeng Chen: An Academic Center for Chinese Economic Practice and Thinking (ACCEPT), Tsinghua University
Lin Lu: An Academic Center for Chinese Economic Practice and Thinking (ACCEPT), Tsinghua University
Xushuo Wang: Bank of China
Kangyi Liu: INSEAD

A chapter in Economic Lessons from China’s Forty Years of Reform and Opening-up, 2021, pp 67-117 from Springer

Abstract: Abstract The cultivation and regulation of the financial system has been a key component of the Chinese economy’s reform and opening-up process over the past 40 years. In this section, we will focus on some stylized facts and provide a brief history of the cultivation and regulation of the financial system over the past 40 years of reform and opening-up before summarizing some economic lessons we can learn from this process. Our main argument is that the steady progress of local-currency-based financial deepening is essential for fast investment in the real economy and channeling savings into investment. However, financial deepening is based on financial stability, which requires the government to proactively monitor and mitigate financial risk.

Keywords: Financial system; Financial deepening; Financial stability; Financial risk (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-33-4520-1_4

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DOI: 10.1007/978-981-33-4520-1_4

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