Zhou Xiaochuan: Global financial stability remains fragile

BEIJING, April 25 (Xinhua) The 21st Ministerial Meeting of the International Monetary Fund (IMF) Committee on International Currency and Finance (IMFC) was held in Washington, D.C., on April 24, 2010. The meeting was attended by 24 directors representing the 186 Member States of the Fund, as well as representatives of the World Bank, the World Trade Organization, the Financial Stability Council and other international and regional institutions and forums. The meeting mainly discussed the global economic situation, fund management and function reform, and so on.　　Zhou Xiaochuan, governor of PBoC, attended the meeting and spoke. Mr Zhou noted that the global economy was showing a positive momentum of recovery, driven by a massive stimulus package, but that the pace and dynamics of recovery in different countries and regions were clear, emerging markets and developing countries were recovering strongly and the recovery in developed countries was relatively slow.　　While some of the functions of the financial system have been gradually restored, global financial stability remains fragile and the outlook for the global economy faces many uncertainties. At present, the main risk of the global economy still comes from developed countries. Sovereign debt risk has become a threat to global financial stability and economic recovery, and its potential systemic impact deserves attention. The extension of the deleveraging process in the banking sector may lead to a lack of financing support for a sustainable economic recovery, which increases the complexity and difficulty of exit strategies. The liquidity injected into financial markets by major developed countries and the uncertainty of their exit policies have increased the volatility of international capital flows and made it more difficult to manage short-term capital flows in emerging market economies.　　The risk of a rise in trade and financial protectionism cannot be overlooked. Zhou Xiaochuan called on the developed countries with weak economic recovery to rebuild fiscal discipline as soon as possible, take measures to curb the transmission and amplification of sovereign risks and avoid trans-border contagion, accelerate financial sector reform and restore the normal function of the financial system as soon as possible, accelerate structural reform and increase the potential of economic growth.　　It is necessary to consider not only inflationary pressures but also spillover effects and potential systemic risks caused by excess liquidity in the financial system.　　At the same time, countries should further strengthen cooperation and share responsibility, especially in strengthening the coordination and foresight of macroeconomic and financial policies, resolutely oppose all forms of protectionism and jointly safeguard financial market stability and promote a strong and sustainable recovery in the global economy. In introducing China's economic situation and policies, he pointed out that in the 2009, China's economy took the lead in achieving a general rebound in the economic situation in response to the international financial crisis package policy measures. In the 2010, China's economy is expected to maintain a steady and rapid growth of the basic situation, but also face complex challenges.　　The task of promoting the transformation of economic development mode and adjusting economic structure is more urgent, and the task of preventing financial risks is still arduous. China will maintain the continuity and stability of macroeconomic policy, and make efforts to improve the pertinence and flexibility of policy according to new situation, continue to implement active fiscal policy and moderately loose monetary policy, continuously improve the package of measures to deal with the international financial crisis, accelerate the transformation of economic development mode, adjust the economic structure, Actively expand consumer demand, focus on optimizing investment structure,To drive the economy into the development track of innovation-driven and endogenous growth, and to comprehensively use monetary and fiscal policy tools, pay close attention to price movements and manage inflation expectations, and effectively prevent and defuse various potential systemic risks. On the governance and functional reform of the Fund, Zhou pointed out that the share structure is the core of the fund's governance. At present, the serious underestimation and underrepresentation of emerging markets and developing countries in the fund organizations have seriously affected the legitimacy and effectiveness of the Fund and must be rectified.　　We urge the Fund to expedite its work by completing its share checks as scheduled by the G20 Pittsburg Summit and Imfc. Zhou stressed that the global financial crisis, which was mainly caused by the improper policies of the financial sector in developed countries, had an unprecedented impact on world trade, employment and income, and that the financial sustainability of the developed countries was a major risk to global financial stability. The fund should adjust the focus of supervision as soon as possible, improve the supervision means, strengthen the supervision of the mature financial market and cross-border capital flow, especially to strengthen the supervision of the financial policy of the developed countries, and further study the evolution and influence of the sovereign risk of the developed countries, and strive to maintain international financial stability and promote