pbc, the mof and financial supervisory authorities also needs to be cultivated. 9. improving financial ecological environment. credit culture is not well developed in china and needs to improve along with the social and economic development. there are still cases of law violation and improper law enforcement in china, which affects financial stability and even the social stability. 10. the spillover effects of economic and financial globalization. with the development of economic and financial globalization, financial stability is increasingly affected by international economic and financial situation and uncertainties such as rising oil prices, global interest rates increasing, us dollar depreciation, geographical conflicts etc. with the depth and scope of china's participation in international production, trade and capital movements gradually enlarged, uncertainties accompanied globalization gains are increased accordingly. besides, because global financial system integration is strengthened, crossborder contagion effects of financial risks will be increased as well. such kind of " spill - over " effects will bring many uncertainties for chinese financial stability. 3 / 5 iii. medium - term strategy to strengthen financial stability and promote financial development it is a systematic project to maintain financial stability, and therefore it involves many aspects. in line with the fundamental principle of maintaining stability by reform and development, the pbc will closely collaborate with other departments to strengthen macro financial control, properly deal with historical burdens, mitigate financial risks, optimize financial structure, promote financial institution reform, improve financial markets, strengthen financial infrastructure, improve financial ecological environment, establish appropriate a long - term financial stability mechanism to maintain financial stability and promote financial development. ( 1 ) improve macro financial control system to provide favorable environment for financial stability. we will continue to adopt economic and legal instruments to strengthen and improve macro financial control system in order to promote steady and relatively fast economic development. the pbc will enhance the timeless, effectiveness and forward - looking aspects of monetary policy, smoothen monetary policy transmission and promote the market - oriented interest rates reform. we will promote rmb exchange rate regime reform in a sequenced manner to gradually establish the managed floating rate regime based on market supply and demand so as to maintain the rmb exchange rate basically stable at an adaptive and equilibrium level. ( 2 ) speed up financial reforms to increase financial institutions'competitiveness. in the coming period, china will continue to reform the financial system, clarify ownership structure, improve corporate governance, transform operating mechanism, strengthen internal control so that commercial banks, securities companies and insurance companies could be transformed as modern financial enterprises with

on a global basis. moreover, the coordination and exchange of information must be strengthened both in “ peacetime ” and during crises. not surprisingly, i consider it important to implement regional financial stability analyses to detect possible vulnerabilities ; the type of analyses now being made in the imf - led exercise in the nordic - baltic region. furthermore, both the institutions and the public authorities must gain greater knowledge of where the risks end up and what might happen if the ultimate risk - takers suffer problems. the nordic countries and the baltic countries financial integration has come a long way in the nordic and baltic countries. there is a close collaboration between the central banks and financial supervisory authorities in the nordic countries. we have agreements on consultation in the event of crises and we hold joint crisis exercises. as swedish banks play an important role in the baltic countries, discussions are under way on the signing of a consultation agreement between the swedish and baltic authorities. one important weakness that remains is the unclear distribution of the financial costs between countries in the event of a crisis. a closely - linked but also unsolved issue is which country ’ s assessment of the situation will prevail and who may decide on measures such as closing a bank. are the danish taxpayers prepared to help pay to save nordea ’ s operations in a crisis or do you see it as a problem for the swedes alone? the question can be reversed, to ask how we swedes would regard a crisis in danske bank. these issues are not unique to our countries ; they apply to all countries and therefore require widescale international management. this is a difficult but important issue to discuss – before the next crisis occurs. one means of making this issue more concrete could be to hold a new nordic crisis exercise based on the conditions in a real bank. it would be necessary in this type of exercise to take a stand on the specific case, which in turn might make it easy to continue a general discussion. conclusion the crises during the 1980s and 1990s led to many important measures being taken : a number of international standards were adopted to create global minimum standards for regulation and supervision, for instance the basel committee ’ s core principles for effective banking supervision. the tasks of the imf and the world bank were increased to systematically identifying vulnerabilities in countries ’ financial sectors, proposing measures to remedy them and giving technical assistance. the private agents in the financial market have also taken initiatives to reduce risks. they have, for instance, established the cls