though obviously apra has the more specific mandate for risk management at the level of the individual institution. with that background i want to ask two questions about the design and conduct of macroprudential policy arrangements in general. 1. is there a single right way for these powers to be allocated between the central bank and other regulatory agencies? and 2. is there a single best practice framework, in terms of instruments and objectives, for these powers to be used? i want to suggest that the answer to both of these questions is no. i ’ ll then suggest a couple of important positive principles we need to stay focused on, regardless of the specifics of our national frameworks. to start with the institutional question : is there a “ right ” way to allocate prudential responsibilities between the central bank and other agencies? certainly a number of jurisdictions have come to the conclusion that they needed to bring more of the supervisory powers under the central bank. this has been perhaps clearest in the uk, where the supervisory functions of the fsa are to be brought fully within the bank of bis central bankers ’ speeches england. a similar but less comprehensive shift in the same direction has been an important part of the regulatory response in the us and the euro area. in some ways these developments seem like a natural response to the crisis. cooperation between the holders of traditional central banking powers and those holding institutional regulatory powers is very important. where that cooperation is considered to have been inadequate, it is natural that institutional reforms would be directed towards fixing the shortcomings. bringing supervisory powers into the central bank is one way of doing that. but it ’ s not the only way these things can be arranged, and i can see both advantages and disadvantages to the more centralised approach. clearly the centralised approach maximises the scope for formalising the coordination between the two sets of functions. but a large institution with both central - banking and supervisory powers may be hard to manage, and it may still be susceptible to a “ two culture ” problem. i think this was one reason for the earlier trend towards separation of these functions a decade or more ago. my general observation is that we don ’ t yet know how these more formalised arrangements will perform. the centralised model has to be made to work and to build up its own culture and track record of success. that will take time, and it ’ s far too early to say that any of the post - crisis arrangements represents a new norm of best

( nasd ), the japan securities dealers association ( jasd ), the korea securities dealers association ( ksda ) have all played a very important role in promoting innovation and development, regulating market behaviors, safeguarding the industry's interests, and forestalling market risks, and are an integral part of financial market regulation system in their respective country. experience has shown that the sros enable market participants to mobilize themselves to exercise self discipline, help the transformation of government functions, make the regulation more responsive to market demand, and promote market innovation and development in a market - based approach. in recent years, a lot of achievements have been made in china ’ s financial market development. however, the financial sector has its problems. for example, the imbalance between direct and indirect financing remains serious as bank loans still dominate financing ; the financial market development is lopsided as the bond market still lags behind securities market, and enterprise bond market remains under - developed ; information disclosure, credit rating and other essential mechanisms have yet to play a sufficient role ; the range of financial products are not diversified and market functions are yet to be fully played out. it is an imperative task to promote innovation and development in the financial market. for quite some time, we focused on liquidity management in the inter - bank money market, but did not fully acknowledge the financing, value discovery and risk management functions of the market. as a result, launching of financial products that are conducive to market development and urgently needed by market participants has been delayed. i hope that the association will gather members ’ wisdom and serve their need ; and innovation of market participants will be given full play to develop innovation mechanisms and patterns based on the special features of otc market. in the future, the products that are developed based on members ’ need, and are suitable for trading among institutional investors who have pricing and risk managing abilities will be registered at the nafmii and reported for filing with the regulatory authority. administrative exam and approval procedure will be abolished for such products. as the agency that overseas the operation of nafmii, the pbc has a lot of expectations on the newly established organization. i hope that the association will provide good services to its members and to the government and the general public, exercise self regulation functions, and contribute to innovation, reform and development of financial markets in china through hard work and innovation. thank you.