efforts toward the establishment of a modern financial system and a regulatory / supervisory system to the extent that all financial institutions will be properly regulated / supervised by law, and financial risks are properly reduced in the interest of significantly improving the order in the financial industry and promoting a high and steady growth of the economy. in so doing, the most crucial policy measure is to reform the organisational structure of the central bank. the number of provincial branches of the central bank will be reduced in a well - planned approach. a number of first - tier branches across the judicial administrative line will be created so as to enhance independence, authority and expertise of the central bank. in addition, with regard to commercial banks, their provincial branches and branches located in provincial capital cities will be consolidated gradually and the grassroots branches with overlapped businesses with their counterparts that have incurred sustained losses will be removed. when conditions allow, urban commercial banks will be created in 300 city centres with equity shares from local fiscal authorities with a view to establishing a multi - layered financial system comprising different financial institutions. the underlying nature of financial institutions requires the existence of a set of rules and regulations for the management of the institutions. all these institutions shall function in compliance with laws and regulations and no government agencies or individuals shall be allowed to interfere with the business management of financial businesses. again, these institutions shall be required to assume managerial responsibility and risk inherent in the business. their internal control system shall be strengthened. the supervisory board shall be established for all state - owned commercial banks. the lending quota imposed on these banks will be removed and they will gradually adopt the basic asset and liability ratios and risk management techniques for managing their balance sheets. with reference to internal practices and in consideration of the country circumstances, we will improve the existing system for asset classification and loan loss provisioning. efforts will be made to improve the system for capital replenishment in order to increase capital adequacy of financial institutions. in maintaining the order in financial industry, we shall follow the principle of segregating commercial banking from securities and trust businesses and close all unlicensed financial institutions. all these measures will be phased in during the next three years according to a well designed plan. by the decision of the state council, we shall build a modern enterprise system, a modern financial and regulatory system within a time framework of three years. i feel optimistic that state - owned commercial banks and other commercial banks will operate under an new mechanism at the turn of the century. the lessons from the financial

su ning : development of the bankcard industry in china speech by mr su ning, deputy governor of the people ’ s bank of china, at the national bankcard work conference, beijing, 25 april 2006. * * * ladies and gentlemen : in february 2001, pbc hosted the first national bankcard work conference. at that conference, a series of work priorities were identified, which greatly promoted the development of the bankcard industry. the priorities include setting up a uniform business and technical standard, accelerating the development of national bankcard network, promoting a uniform cup brand, and reforming bankcard management system. today, the national bankcard work conference is held again jointly by the pbc and other ministries. the objective of this conference is to, under the guidance of den xiaoping theory and the important thoughts of “ three represents ”, summarize past successful experiences, analyze current challenges, implement policies and measures set forth by the several opinions regarding the development of the bankcard industry formulated by nine ministries, outline work plan for future development, and promote rapid and healthy development of the bankcard business by adopting a scientific development concept to build a harmonious society. mr. jiang dingzhi, vice chairman of the cbrc, mr. lou qinjian, vice minister of commerce, mr. xu shanda, deputy administrator of the state taxation administration, mr. zheng shaodong, assistant minister of the ministry of public security, mr. zhang hongli, assistant minister of the ministry of commerce, and mr. li dongrong, deputy administrator of safe attended this conference and delivered speeches. now, on behalf of the pbc, i ’ d like to say a few words : first, achievements of bankcard industry the cpc central committee and the state council have always attached great importance to the development of the bankcard industry. in december 2001, comrade wen jiabao clarified the “ threeone - four ” objective for the building of a national bankcard network and the bankcard acceptance market in the tenth “ five - year ” plan period. as for other important issues such as the legal framework, the prevention of bankcard risk and the security of financial information, comrade wen jiabao and comrade huang ju also made important instructions, clarifying the direction for future development. especially recently, comrade wen jiabao made important instructions on extending bankcard coverage and further improving beijing ’ s bankcard environment as an olympic host city. so under the leadership of the cpc central committee, with