- bank bond market and the whole financial market. first, focusing on financial product innovation and further expanding direct financing channels. to satisfy the needs of the inter - bank bond market and provide instruments for market participants to conduct liability management and prevent risks, we will further conduct in - depth research and launch as soon as possible financial products which are based on corporate credit standings such as the financial bonds and asset backed securities, and gradually develop financial derivatives according to market conditions. 1. actively promoting the issuance of financial bonds by financial institutions. while improving the management of subordinated bonds issued by commercial banks, steps will be taken to encourage financial institutions to issue financial bonds in the inter - bank bond market, provide instruments for commercial banks to enhance their liability management and ease the mismatch of their asset and liability term structure. 2. speeding up the issuance of asset backed securities. efforts will be made to improve the pilot program on credit asset securitization, accelerate the launch of asset securitization business on a pilot basis, and promote china development bank and china construction bank, as the pilot institutions, to make detailed plan on the securitization of credit assets and mortgage loans respectively so as to enable them to formally issue asset backed securities at an early date. 3. promoting the issuance of rmb bonds by international financial institutions in domestic market. the issuance and trading of rmb bonds by international financial institutions will be regulated according to the promulgated administrative rules on the issuance of rmb bonds by international financial institutions. 4. vigorously developing short - term corporate financing bills. following the promulgation of the administrative rules for short - term financing bills and the successful introduction of the first batch of short - term corporate financing bills, the development of short - term corporate financing bills market will be further promoted and regulated so as to reduce the reliance of enterprises ’ financing on bank loans. 5. fostering the circulation of corporate bonds in the inter - bank bond market. bidding for corporate bond issuance by institutional investors in the inter - bank market will be publicized and promoted to further develop the corporate bond market. 6. gradually introducing financial derivatives. to enhance market liquidity and provide instruments for market investors to hedge risks, bond credit and forward business will be launched according to the development of market, and operating patterns and institutional framework will be determined for bond credit and forward products. meanwhile, relevant rules and regulations will be revised to provide legal support for these two kinds of products.

, however, provided with a stark reminder a few weeks ago about the inherent risks associated with volatile capital flows, when we saw abrupt and sizeable outflows in the wake of sudden changes in investor sentiment, and the associated impact on currencies and emerging market assets in general. signs have emerged of a slowdown in emerging market economies, while inflationary pressures continue to be somewhat elevated. south africa ’ s situation has been a little different, as growth has been somewhat more subdued as compared to other emerging market economies and demand driven inflationary pressures largely absent. the monetary policy committee statement after our most recent meeting in september highlighted the challenges facing monetary policy presently and going forward. these challenges are driven by recent data which have confirmed that while the domestic economic activity has slowed down considerably in the second quarter, at the same time, there is upward pressure on bis central bankers ’ speeches domestic inflation driven by a number of exogenous factors. the worst case scenario for monetary policy of course, is a combination of slow growth and higher inflationary pressures, a real double whammy scenario. different shocks, depending on whether they be demand or supply driven, require different policy responses. what is important is to understand the source of the shocks, their magnitude and possible duration, as well as the associated inflationary consequences, and only once we understand this, judge what the suitable policy response will be. sounds much easier than it is in practice! in the case of a demand driven shock or demand - pull inflation, monetary policy would generally be tightened sufficiently in an effort to bring inflation back towards any stipulated target. cost push inflation on the other hand is caused by rising costs of production, such as a rise in oil prices, which will tend to drive up petrol prices and in turn, the prices of other goods as transportation costs increase. this type of inflation causes a certain level of inflation across the economy, but also tends to have a dampening effect on growth, as consumers will tend to adjust their spending habits to take into account increased spending on these items. the policy response in this case is not quite as straightforward. a tightening of policy may bring down inflation, but will not have any impact on the root of the problem being rising oil prices, and in fact would most likely exacerbate the fall in output and worsen the impact of the shock for households and businesses. having said that, however, discarding a supply side shock, such as a spike in oil prices, may not always