my view. they should not be used to finance future budgets long after a crisis has passed. yet i am well aware that germany ’ s debt brake is very strict in terms of its general thrust. and precisely when low debt ratios have been achieved, i would consider it acceptable to loosen the rules moderately. to this end, the bundesbank has put forward stability - oriented reform options. appropriate fiscal rules are also indispensable for the euro area. what we need here are fiscal limits to shield monetary policy. in this way, national and european rules complement each other. and that brings our walk to the grove where different plants form a whole – just like europe does. ladies and gentlemen, you are no doubt aware of the current discussion to reform the european union ’ s fiscal rules. the european commission has presented a reform proposal based on which the member states intend to reach a consensus by the end of the year, if possible. however, the commission ’ s original proposal does not look promising. it includes extremely complex calculations, far - reaching assumptions as well as negotiations with member states on individual adjustment plans. how this proposal would reliably bring down debt levels was not apparent to me. i therefore welcome the fact that the federal government is committed to a more ambitious approach. the finance ministers are currently hard at work debating this topic, and although it is not yet clear how far these talks have progressed, it does look as if some significant improvements have been made to the commission ’ s proposal. thus, there will probably be some specific minimum requirements for member states ’ expenditure plans. this means that the objective of reducing high debt ratios will be pursued more rigorously than under the commission ’ s proposal. this is welcome news, even if the devil is in the detail. the exact values still need to be hashed out. in my view, three other aspects are key to making a success of this reform. first, implementation of plans and targets needs to be improved upon. this applies to the member states, but also to the commission in its capacity as the main monitoring body. second, it should be ensured that high structural deficits and debt ratios are reliably reduced. if they fail to be reduced, this should not be excused by the fact that overly optimistic expenditure plans have been adhered to. third, there should not be too much discretionary scope as concerns important decisions. for example, the decision whether or not a procedure should be opened or intensified needs to be reliable and

instructed that we should review the housing reform and the real estate development experiences in full scale so as to identify the broad target and tasks in the future. i think we should focus on the following aspects in studying the housing financial system : first is the products system. a variety of financial products should be developed to serve different purposes and customers. currently, we don ’ t have such housing financial products that are targeted at special groups of people in the society, such as low - income families and entry - level staffs. even in commercial housing financial field, bank loans are the major products, so risks are excessively concentrated in the banking sector. we should promote housing financial products innovation to ward off risks. second is the market system. housing financial market should consist of different layers, including not only the indirect credit market, but also direct financing market which provides both direct financial instruments and marketplace to defuse relevant risks, such as credit maturity mismatch and liquidity problems. development of the housing financing should also rely on the development of the capital market and money market. third is the organization system. housing financial market should comprise not only financial institutions providing direct financing to the customers, but also institutions that involve in housing construction, trading and consumption such as the property appraisal agencies, loan insurance ( guarantee ) institutions, accounting offices, law offices and rating institutions etc. iii. research should be conducted down to the earth to formulate a proper development blueprint. both academics and governments have made great efforts to improve china ’ s housing financial system by studying international experiences, with some policies achieving good results while others entailing further studies. starting in 2003, the pbc has focused on resolving the strategic issues of housing financial development and communicated with the ministry of construction, the china banking regulatory commission and have reached important consensus. in 2005, the pbc began to cooperate with the world bank in relevant research and study program aimed to learn from the mature experiences of other countries. this seminar represents a further endeavor in this direction. i would like to give my personal views about the comprehensive research project : first, we must learn the essence of other countries ’ experiences, not only the surface. attention should be paid to successful experiences and failure lessons. the housing financial system of china and development strategy should be designed through summarizing experiences and exploring the embedded rules. second, chinese social, financial and economic situation should be fully considered and market development principles should be observed when mapping out our housing financial system and the development