Research On The Coordination Mechanism Of The Central Bank's Macro-prudential Supervision Function

After the 2008 subprime mortgage crisis,a new policy framework is emerging as a response to the international financial crisis,aimed at filling the clear gap between monetary policy and microprudential regulation and curbing systemic risks in banks and financial markets.As traditional monetary policy is committed to addressing price stability,microprudential regulation has been concerned about the risks faced by individual financial institutions.The lessons of the financial crisis have raised awareness of the need to develop a policy framework to ensure close coordination between the two policy areas and to clarify the objectives of regulators to address systemic risks at the macro level.Thus,in order to maintain the stability of the financial system,the new macroprudential regulation aims to reduce the pro-cyclical nature of the financial system,reduce systemic interference and ensure that the financial system remains resilient to systemic shocks.In order to meet the needs of international financial development and the reform of the domestic financial system,the Financial Stability and Development Commission(FSDC),an institution directly under the State Council,was established in 2017 to coordinate the work,which marks a major change in China's macro-prudential supervision system.It has created an environment for the “two-pillar” regulatory framework.In 2018,the Banking Regulatory Commission and the Insurance Regulatory Commission merged,and the function of macroprudential supervision returned to the people's Bank of China,which is another prerequisite for China to improve the “two-pillar” regulatory framework.As a result,the report of the 19 th National Congress of the Communist Party of China(CPC)further responded on the basis of summing up the aforementioned series of reforms: to establish and improve the regulatory framework of “macro-prudential policy and monetary policy.”The proposal of “two pillars”framework marks the new era of financial supervision in China,but at the same time,it also leads to a series of new problems.The new regulatory system poses a new challenge to the people's Bank of China to perform the function of macro-prudential supervision.In the process of perfecting the “two-pillar” framework,it has experienced the establishment of the Financial Stability and Development Commission,the merger of banks and insurance,and the attribution of the main functions of monetary policy and macro-prudential supervision to the central bank.Therefore,under the framework of “two pillars”,it is particularly important toanalyze the main functions of the people's Bank of China in macro-prudential supervision and the responsibilities of the Financial Stability and Development Board in the macro-prudential supervision system,and to coordinate with micro-prudential supervision and monetary policy.Based on this,this paper mainly discusses how the people's Bank of China coordinates with other financial institutions when performing the main functions of macro-prudential supervision.First of all,it expounds the implication of macro-prudential supervision,the necessity of theoretical and functional coordination.Secondly,through the comparative analysis of the power boundary and coordination mechanism of macro-prudential regulatory institutions in the United States,the Britain and other countries,this paper summarizes their basic characteristics and the reference significance for the implementation of the new financial prudential policy in our country at present.Again,This paper expounds the relevant functions involved in the perfection of the “two pillars” framework when the people's Bank of China,as the macro-prudential regulatory institution of our country,performs the macroprudential supervision function,such as the monetary policy and the Financial Stability and Development Commission.The status quo of coordination between the functions of the Commission and the functions of micro-prudential supervision,it also expounds the problems existing in the coordination between the people's Bank of China and other institutions in the process of performing macro-prudential supervision function under the framework of “two pillars”.The fourth part,drawing lessons from the relevant foreign system and legislative experience,according to the actual process and future development direction of the current financial supervision legislation in our country.Furthermore,it puts forward the concrete path of how to perfect the coordination mechanism of macro-prudential supervision function which adapts to the socialist market economy system of our country.