china ’ s financial market, including central banks, asset management companies and pension funds. one of the tasks for financial market is to open up in an orderly manner to enable convenient and effective asset allocation by both foreign and domestic investors. this is the first important function of the financial markets. the second major function is risk management, i. e. through price discovery and risk management tools. the day - to - day tradings on the financial market necessitate continued price discovery and accurate pricing. if we take government securities yield curve as the risk - free interest rates, financial market will price all kinds of risk premiums of financial products in transactions and send clear signals. moreover, financial market also provide all kinds of hedging tools and adequate liquidity to facilitate the selling and buying activities of market participants, and enable effective hedging of risks. once the foreign investors are investing in the onshore market, they will find a lack of derivatives, hedging tools and other financial products. this year our priority is to create a supportive environment to provide hedging tools for investors to effectively hedge and manage risks. the third function is to provide financial services to households and enterprises. financial services are mostly about resource allocation and risk management. here i wish to emphasize that professional financial services lower transaction cost and save time. efficiency of financial services can be measured by the time saved. for example, 20 years ago, one had to spend half a day to go to several places to pay the water, electricity and housing bills. ten years ago, a onehour visit to the bank would do the job. today, the bills can be paid in five minutes through online banking service or mobile payment applications. this shows that financial services are much more efficient today. it save consumers time just like eating out is more efficient than cooking at home, and buying apparel in a store is more efficient than making it yourself. therefore, the financial sector is in essence a competitive service industry. we will advance supply - side structural reform and open up to foreign investors so that the financial system can perform the three functions properly. on one hand, it increases the supply of financial factors by bringing in financial institutions, services and products. it allows us to make better use of both overseas and domestic markets and resources, improve resources allocation, and meet the needs for diversified financial services. on the other hand, opening up of the financial sector will help improve domestic institutional arrangements. in this process, china has 2 / 5 bis

risks, but may add to the complexity of financial risk prevention. therefore, efforts should be made to improve the financial risk prevention system to catch up with the progress of openness. since 2018, significant progress has been made in the prevention of financial risks in china. firstly, the financial regulatory system has been reformed. the state council financial stability and development committee have enhanced the coordination in the financial sector. the pbc serves as the committee ’ s secretariat to support its day - to - day operation. mandates of the pbc have been strengthened with more coordination responsibility. allocation of the regulatory resources has been improved. secondly, macro leverage ratio stabilized. as the supply - side structural reform deepens, macro leverage ratio fell by 1. 5 percentage points from end - 2017 to 249. 4 percent at end - 2018. going forward, as china ’ s financial market evolves and the share of direct financing rises, part of the debt financing will be converted into equity financing, which will 3 / 5 bis central bankers'speeches facilitate stabilization of macro leverage ratio. third, the shadow banking sector has been better regulated. we introduced new regulations and supporting measures to address the irregular and unlawful activities in the financial markets, effectively containing the disorderly development of shadow banking system. fourth, macro - prudential management has improved, with measures to strengthen regulation of the systemically important financial institutions ( sifis ), to improve the macro - prudential management of cross - border capital flow, resulting in stronger resilience to withstand the impact of cross - border capital flows. in addition, we have made important progress in the resolution of high - risk institutions in a smooth and orderly manner, so as to maintain the order in the financial market. going forward, we will continue to improve the financial risk prevention and management system to keep pace with further opening - up. first, the coordinating role of the state council financial stability development committee should be fully utilized, to make better overall plans in rolling out policy measures with proper strength and paces to generate synergy. second, the two - pillar framework of monetary and macro - prudential policies should be enhanced. we will strengthen the counter - cyclical role of monetary policy to ensure that the economy operates within a reasonable range. we will constantly improve the macro - prudential policy framework and strengthen regulation of financial holding companies and sifis. we will also add new instrument to the policy toolkit, enhance the real - time monitoring of the financial market,