dusseldorf, it finally replaced berlin as germany ’ s financial center, partly because the central bank of germany, the deutsche bundersbank, is located there. the european central bank has also been established in frankfurt, conducting unified monetary policy and inter - bank fund clearance and settlement within europe. this has in turn strengthened frankfurt ’ s status as an international financial center in the european continent. similarly, although zurich is not the capital of switzerland, it has developed into an international financial center partly because the central bank was previously located there. the establishment of the pbc shanghai head office is expected to produce similar effects. on the one hand, by improving monetary policy operation and providing better services to the market, we expect that more domestic financial institutions will move some of their businesses or departments to shanghai and more professionals will be attracted to work in shanghai. on the other hand, with expanded exchange and cooperation of the pbc shanghai head office with other central banks and financial organizations, shanghai is expected to play a larger role in the financial affairs in the asianpacific region, which will help accelerate the development of shanghai as an international financial center. reporter : could you briefly describe the internal organizational structure of the pbc shanghai head office? xiang : the pbc shanghai head office consists of 7 functional departments and 3 supporting departments to ensure the effective performance of duties. functional departments include open market operations department, financial market management department, financial stability department, statistics and research department, international department, financial services department and foreign exchange management department. the 3 supporting departments are the general management department, human resources management department and staff disciplinary department. reporter : how will the pbc shanghai branch be consolidated with the pbc shanghai head office? will the pbc shanghai branch still exist after the consolidation? and do you have a timetable for the consolidation? xiang : according to the functions designated to the pbc shanghai head office, it will be established based on the existing shanghai branch. the businesses currently conducted by the shanghai branch will partly be transferred to the open market operations department, financial market management department, financial stability department, statistics and research department, and international department, respectively, and partly be taken over by the financial services department. the foreign exchange business will be conducted by the foreign exchange management department. meanwhile, to maintain business consistency, the pbc shanghai branch and the state administration of foreign exchange ( safe ) shanghai branch will still exist in nominal sense after the consolidation. since the establishment of the pbc shanghai head office involves the transfer of

li ruogu : reform the governance of the imf speech by mr li ruogu, deputy governor of the people ’ s bank of china, on the seminar on governance of the bretton woods institutions, washington dc, 1 october 2004. * * * mr. chairman, ladies and gentlemen, it is my great pleasure to be invited by the annual meeting organizers to share with you my views on the governance issues of the bretton woods institutions, especially on the occasion of their 60th anniversary. i. the main problem of the governance of the imf and its negative implication as we all know, the imf was established sixty years ago as a global monetary cooperative institution, with the aim to help member countries adjust international balance of payments and stabilize exchange rate movement. the quota has been set as the key factor to determine voting powers and access to fund ’ s resources of member countries. when the fund was constituted, the quota distribution was decided by the political and economic situation at that time. due to this reason, the quota share of the u. s. was as high as 36 percent and that of uk 17 percent. obviously, few industrial countries dominated the fund ’ s governance in its very early days. nevertheless, to reflect the equity of member countries - though in a very limited way - each member country was assigned 250 basic votes in addition to its votes determined by quotas. and the basic votes accounted for 11. 3 percent of the total votes at the inception of the imf. the following decades have witnessed great changes in global political and economic environment, including emergence of many newly independent sovereign countries, collapse of the bretton woods system, the oil crises in the 1970s, the international debt crises in the 1980s, booming international private capital flows throughout most 1990s and subsequent capital account crises in several emerging markets in the late 1990s. the fund responded with expansion of its memberships from 40 to 184, augmentation of quota size by almost 37 folds and allocations of special drawing rights ( sdr ) between late 1960s and 1980s. however, these phenomenal developments haven ’ t been accompanied by fundamental improvement of the governance structure within the fund. the main problem of its governance is that the decision - making mechanism has not reflected the rapidly evolving political and economic environment and principles used for allocating quotas when the fund was established has been abandoned resulting in a small group of member countries easily forming majority votes and exercising veto powers. thus, the imf doesn ’ t belong to its majority members