to real estate credit only. it covers all the financing modes utilized for the development of the real estate industry such as equity financing, bond financing, credit financing and trust financing. like the development of other commodity markets, the development of china ’ s housing market must resolve the problems of final effective market demands and the demand for capital in the process of commodity production. the availability of working capital in the process of commodity production depends on whether the final effective demands exist. in my opinion, the problems of the current real estate finance in china do not mainly revolve on the credit policy for the real estate industry, instead they include the following 2 issues : first, there is not a risk separation mechanism in shape for the financing modes of the real estate industry. most of the risks are concentrated in banks ; second, the housing monetarization reform has not been completed yet. we are still lacking an appropriate solution that shall properly deal with the relationship between carrying out the housing monetarization reform and ensuring the basic living standard of the general public. this leads to some problems yet to be resolved in respect of income allocation, which shall have a negative impact on the effective demands for housing commodities. the former belongs to financial policy issues, while the latter belongs to housing policy and income allocation policy issues, but the latter has great impact on the safety of financial activities. we shall analyze the effective demands in the market as well as the effectiveness of various financing modes given the status quo of income allocation. we shall make research on the real estate finance in terms of the match between risk and return. the real estate industry is a capital intensive industry. prior to world war ii in the 20th century, the real estate market in various european and american countries were dominated by house leasing and tenancy. after world war ii, the purchase of houses was on rise and gradually became the predominant trade form in the market. however, nowadays tenancy and selling of houses still co - exist in the market in these countries. thanks to the promotion of housing mortgage loans, ordinary residents are now able to have access to the house purchase market. however, if the mortgage loans are improperly dealt with, they could bring about financial crises such as the crisis of the thrift and loan institutions in 1980s in the united states. maintaining the co - existence of house tenancy and selling is not only a method to satisfy the housing needs of the low - income people, but also a prerequisite to maintain the free mobility of the workforce.

in a tightening phase of the interest rate cycle. while price stability remains the primary focus of monetary policy, the bank has indicated that this objective will be pursued in a manner so that economic growth outcomes are not unduly undermined. as we explained in the july mpc statement, monetary policy is on a “ gradual normalisation path ”, which will be highly data - dependent. the sarb remains committed to its mandate of maintaining price stability in the interest of balanced and sustainable economic growth in south africa. in this regard, it is important to note that despite the 75 basis point increase in the repo rate since the beginning of the year, the real repurchase rate is still marginally negative thus ensuring that monetary policy remains supportive of the domestic economy. 3. the new financial services regulatory regime in south africa the great recession, which began in 2008 has shown that imbalances between the real and financial sectors of the economy could increase the vulnerability of the financial system. in addition, with hindsight, we now know that such vulnerabilities may not become evident solely through the supervision of individual institutions. for this reason, macro - prudential aspects of financial stability have gained traction in policy circles around the globe. south african policymakers have also engaged in a process of reviewing and revamping the regulation of the financial sector. in february 2011, the minister of finance announced that south africa would be shifting to a “ twin peaks ” model of financial regulation. at the end of last year, the national treasury published the draft financial sector regulation bill ( twin peaks bill ), which provides some detail around the architecture of the twin peaks model. in terms of the twin peaks model, a prudential authority ( pa ) will be established within the sarb to oversee the safety and soundness of banks, insurers, financial conglomerates and key financial market infrastructures. the fsb will become the market conduct authority ( mca ) and will promote integrity and efficiency of financial markets in order to safeguard the interests of south african consumers of financial services. it goes without saying that co - ordination between the two regulators will be crucial to ensure the overall stability and robustness of the south african financial system. the exact date of twin peaks implementation will be finalised once the necessary legislative processes have taken place. it is envisaged that the twin peaks model of regulation will come into effect by the end of 2014 although this is dependent on the parliamentary process and the final enactment of the bill