also a resource, a scarce resource. hence, the marketization of interest rate is very important, and the rmb interest rate, which is determined by the supply - demand relationship of the market, must not be distorted. only in this way can the resources be allocated in a marketbased manner. the interest rate shaped by the supply - demand relationship also reflects risk premium. if your risk is relatively high, then the market will require a higher interest rate. by contrast, if your risk is relatively low, then your risk premium will be low as well, which enables you to borrow at a lower interest rate. there is profound knowledge in market allocation of funds. regulation tools are necessary in achieving the goal of monetary policy. the tool system of china ’ s monetary policy is relatively simple. first of all, there is open market operations ( omo ) for injecting or withdrawing liquidity ; second, the pbc can adjust money supply with central bank lending and central bank discount ; third, depository financial institutions can be required to park deposit reserves in the pbc ; additionally, we can also supply liquidity to the market with the medium - term lending facility ( mlf ), the standing lending facility ( slf ) and other tools. just now i mentioned marketization of the interest rate. you may have heard a phrase called “ interest rate corridor ”. the central bank can adjust and control the interest rate between a floor and a ceiling level, which is called “ interest rate corridor ”. in the times of planned economy, loan quotas were set and resources allocated through administrative measures. after that, commercial banks came into existence, the planned economy was replaced by market economy, and the interest rate determined by market supply and demand came among. at this point, an important question is, “ what is the appropriate level of the interest rate? ” we can see that central banks in various countries all concentrate on the adjustment and control of the interest rate. the federal reserve mainly regulates the federal funds rate by adjusting it to a level deemed as appropriate, which will then affect the interest rates on deposits, loans and treasury bonds and thus forming market interest rates. at present, the focus of china ’ s monetary policy is gradually shifting from quantity control to price control. you may ask, “ currently what is on earth the focus of the pbc, quantity control or price control? ” my answer is, we are in a transition from quantity to price control, and both tools are employed

the first arrow is to encourage banks to grant loans to private enterprises, especially to small and medium ones. we saw the annual new high of private enterprise bond issuance in november. how about bank loans to private enterprises? is there any improvement? yi gang : this year, we paid much attention to encouraging rmb loans in macro - economic management. in november, the rmb loans increased by rmb 1. 25 trillion and the new rmb loans from january to november exceeded rmb 15 trillion, an increase of rmb 2. 14 trillion year on year. this year also witnessed decreased shadow banking and off - balance - sheet financing activities, particularly trust loans and entrusted loans. the important goal of macro - economic management is to increase the on - balance - sheet rmb loans to hedge the decline of shadow banking and off - balance - sheet financing activities. although the loan growth in this year is not slow, as the increase still goes slightly smaller than the decrease of off - balance - sheet activities, we may find the monetary conditions not that loose. market needs indeed play a part here, but it is mainly decided by economic factors and economic cycle. when conducting counter - cyclical adjustment, we emphasized both market - based operation and risk prevention and control, so as to fill the financing gap in an optimal way. by loan structure, the pbc increased the quota of central bank lending and central bank discount by rmb 300 billion, mainly to support small and medium banks who offer loans to smbs and private enterprises for a large part. i ’ ll skip the figures that all provinces have provided in details. central bank lending and discount are subject to bookkeeping, so we have a clear picture of which small and medium enterprises are beneficiaries. moderator : so, to some degrees, the support from the pbc to commercial banks and the loans from commercial banks to small and medium enterprises is linked up to some extent? yi gang : yes, they are subject to bookkeeping. it means that commercial banks need to keep accounts when they get the quota of central bank lending, specifying the amount of loans they grant to smbs and private enterprises and the total loans as well. we put more emphasis on loans to enterprises with a credit line of up to rmb 5 million and rmb 10 million, as they are broadly real sme loans. 13 / 15 bis central bankers'speeches moderator : you mentioned that the third arrow is equity financing. would you please give us more