The “Twin-Pillar” Framework of Monetary and Macroprudential Policies in China: A Discussion

Yi Huang

Chapter 15 in Macro-financial Stability Policy in a Globalised World: Lessons from International Experience:Selected Papers from the Asian Monetary Policy Forum 2021 Special Edition and MAS-BIS Conference, 2023, pp 311-315 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Since the global financial crisis (GFC), macroprudential policy has been gradually adopted by policymakers and plays an increasingly important role in financial stability. Over the past four decades since the Chinese economic reform, the financial system has been rebuilt and is among the largest in the world quantitatively. Along with the frequent incidents of financial risks, high leverage ratios, property price bubbles, local government debt and banking sector issues, Chinese policymakers officially adopted the twin-pillar framework of monetary and macroprudential policies in 2017 to maintain inflation and financial stability. Thus, there is a growing body of literature on China’s macroprudential policy, its relationship with monetary policy, its implementation and effectiveness…

Keywords: Macro-financial Policy; Policy Framework; Macroprudential Policy; Monetary Policy; Fiscal Policy; Capital Flow Management Measure; Capital Control; Foreign Exchange Intervention; Integrated Policies; Multiple Policies; Policy Trade-off; Policy Substitute; Policy Complement; Policy Interaction; Policy Space; Central Bank; International Spillovers; Spillbacks; Sending Country; Receiving Country; Financial Channel; Financial Regulation; Financial Stability; External Stability; Advanced Economy; Emerging Market Economy; Capital Flow; Portfolio Flow; Banking Flow; Exchange Rate; Banking System; Non-bank Financial Institution; United Kingdom; Sweden; China; Hong Kong Sar; India; Indonesia; Korea; Singapore; Latin America; Croatia (search for similar items in EconPapers)
JEL-codes: E E52 E58 E6 F F01 F3 F38 (search for similar items in EconPapers)
Date: 2023
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