OREANDA-NEWS. May 13, 2013. The People’s Bank of China and the Deutsche Bundesbank held in Beijing their second meeting within the framework of the Sino-German Financial Stability Forum. This represented a continuation of the dialogue on current financial stability issues first embarked upon in 2011, underlining the importance of openly exchanging ideas and sharing experiences. The Sino-German Financial Stability Forum is a key outcome of the enhanced strategic partnership between China and Germany agreed at government level two years ago.

At the meeting, the People’s bank of China and the Bundesbank exchanged the views on financial stability situation, the cross-border use of RMB, macroprudential policy issues, European banking union and deposit guarantee schemes. The People’s Bank of China delegates gave overviews of China’s recent ecnomic performance and its financial sector outlook as well as the cross-border use of RMB, pointed out some challenges to China's financial stability, and emphasized that China would deepen financial reforms, promote steadily liberalization of interest rate, expand the cross-border use of RMB, further develop bond market, improve a counter-cyclical macro-prudential framework, strengthen financial stability monitoring and asessment as well as enhance the risk resolution regime, so as to effectively prevent and mitigate systemic risk.

The Bundesbank set out issues relating to macroprudential policy as a central challenge in the area of financial stability. Under the new Financial Stability Act, the Bundesbank is assigned a prominent role, which includes responsibility for the ongoing analysis of issues that are key to financial stability, and for identifying and assessing risks to financial stability (macroprudential oversight). If the Bundesbank identifies any threats to financial stability on the strength of its analyses, it will submit proposals on how to avert or reduce such threats in the form of warnings or recommendations.

The Chinese side was represented by Dr. XUAN Changneng, Head of Financial Stability Bureau (Director General) , Ms. TAO Ling, Deputy Director General of Financial Stability Bureau and Ms. WANG Dan, Deputy Director General of Monetary Policy Department II. From the Bundesbank, Mr. Karlheinz Bischofberger represented the Financial Stability Department, whilst Mr. Erich Loeper was there to represent the Banking and Financial Supervision Department. At the conclusion of the meeting, the two sides reaffirmed their intention of continuing to pursue cooperation between the People’s Bank of China and the Deutsche Bundesbank in the area of financial stability.