A High-Level Symposium jointly organized by International Monetary Fund (IMF) and People’s Bank of China (PBC), Financial Stability Monitoring and Management: Experiences from FSAP and Recommendations to Improve It, was held in Shanghai December 9-10, 2011. Attending were senior central bankers, financial regulatory authority officials from 17 Asian-Pacific economies such as Korea, Japan, India, Indonesia, Australia, and representatives from the Financial Stability Board, Basel Committee on Banking Supervision, International Organization of Securities Commission (IOSCO) and International Association of Insurance Supervisors (IAIS) and other international organizations, as well as eight IMF Executive Directors, including those from constituencies of the United States, the United Kingdom, Japan and Northern Europe. Officials in charge of China’s FSAP exercise from PBC, Ministry of Finance, China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), China Insurance Regulatory Commission (CIRC), State Administration of Foreign Exchange (SAFE) and managers from Chinese financial institutions participated in the symposium as well.
At the opening session, PBC Governor Zhou Xiaochuan made welcoming remarks and delivered a keynote speech. He pointed out that the global financial crisis underscores the importance of Financial Sector Assessment Program (FSAP). The Chinese government attaches great importance to FSAP. Based on the results and suggestions of the assessment and combined with practices of China’s financial reform and development, the Chinese government continuously builds on its progress and makes improvements. Zhou Xiaochuan stressed that each country should strengthen macro-prudential management, explore counter-cyclical adjustment approaches and enhance capacity-building in terms of systemic risk monitoring, early warning and crisis management.
IMF Deputy Managing Director Zhu Min participated in the symposium and gave the opening address. He said that with increasing volatility in the international financial market, the global economic growth is moderating. Each country must take precautions and be prepared for potential market environment changes. Concerning FSAP program, the IMF is willing to keep the floor open and listen to suggestions from all sides in order to optimize the assessment framework and let FSAP play a more important role in the Asian-Pacific region.
At the symposium, delegates from country authorities and international organizations engaged in a comprehensive discussion on experiences and lessons from FSAP. They summarized progress in strengthening systemic risk monitoring and experiences in establishing macro-prudential policy framework. The participants agreed that FSAP is beneficial to a country (region) as a complement to its own financial stability assessment, whereas improvements in assessing framework and innovation in mechanism and methods are still needed in order to produce objective and practical results and suggestions based on the economic development stage and characteristics of the assessed country. Meanwhile, against the backdrop of global economic and financial integration, FSAP should emphasize more on analysis of cross-border and cross-market linkages and systemic risks, and strengthen monitoring and early warning on risk sources and spillover channels. Central banks and financial regulatory authorities of all countries (regions) should take concrete measures to promote international cooperation and exchanges for mutual benefits and win-win results.
PBC Deputy Governor Liu Shiyu said in his conclusion remarks that, given the financial risk spillovers, each country should establish financial risk monitoring and cooperative action mechanisms, facilitate information sharing between financial regulatory authorities of domestic and host countries, prevent moral hazard in cross-border regulation and avoid spillover effect of financial crisis.
The symposium has helped representatives from the participating countries and international organizations improve their understanding of China’s financial sector reform, development and financial stability work. It is also conducive to coordination and cooperation in the Asian-Pacific region for financial stability monitoring and management.
