2016/9/20 Response to the 2008 Financial Crisis History of PBoc 1948-1952: establishment of pboc and the national Term Securities Lending Facility(2008/03/11-2010/02/10) banking system Asset-backed Commercial Paper Money Market Mutual Fund People's Bank of China was established in Dec 1st, Liquidity Facility( AMLF, 2008/09/19-2010/02/01) 1948 in Shijiazhuang based on an consolidation of Commercial Paper Funding Facility(2008/10/07-2010/02/01) e huabei Bank, the beihai bank and the xibei Investor Funding Facility(2008/11/24- 2009/10/30) Farmer Bank in northern China First set of rmb was issued and became the fiat 4. Expanded Open Market Operations Agency Mortgage- Backed Securities Purchases In southern part of China, Chiang Kai-sheks Treasuries Purchases and Maturity Extension Program and national currency was still circulating freely Reinvestment Policy History of PBoc History of PBoc 1948-1952: establishment of Pboc and the national 1948-1952: the establishment of PBoc and the banking syste national banking system PBoC moved to Beiping(now Beijing)in Feb 1949 Most private banks went bankruptcy due to the From Sept. 1949, PBoc became directly financial regulations by PBoc supervised by the State Council PBoC helped transforming private-owned banks to People's Republic of China was established in Oct1, joint-owned ones Foreign banks'business was halted; foreign PBoC's major functions included money supply, currencies were prohibited circulating in China treasury management, stabilizing national Others were transformed to joint-owned (priva financial markets and supporting economy and government)banks reconstruction after civil war History of PBoc History of PBoC 1953-1978: national bank in the planned economy 1979-1992: transition from a national bank to the central bank PBoC served the national institution that governed In 1978, China began to adopt the reform and the whole financial sector and took the banking opening-door policy Various forms of financial institution(commercial PBoC controlled both the sourcing and anks, trusts, insurance companies )came forth, a employment of capitals in the planned economy central bank was necessary for the regulation In Sept. 1983, State Council decided to have the adjusting the money circulation by providing all PBoC function as a central bank with the separation of ICBC owned firms and even individuals 72016/9/20 7 Response to the 2008 Financial Crisis • 3. Credit Market Liquidity Tools – Term Securities Lending Facility(2008/03/11‐2010/02/10) – Asset‐backed Commercial Paper Money Market Mutual Fund Liquidity Facility(AMLF, 2008/09/19‐2010/02/01) – Commercial Paper Funding Facility(2008/10/07‐2010/02/01) – Money Market Investor Funding Facility(2008/11/24‐ 2009/10/30) – Currency Swap Agreements • 4. Expanded Open Market Operations – Agency Mortgage‐Backed Securities Purchases – Treasuries Purchases and Maturity Extension Program and Reinvestment Policy 1‐37 History of PBoC • 1948‐1952:  establishment of PBoC and the national banking system – People’s Bank of China was established in Dec.1st, 1948 in Shijiazhuang based on an consolidation of the Huabei Bank, the Beihai Bank and the Xibei Farmer Bank in northern China – First set of RMB was issued and became the fiat money in northern China – In southern part of China, Chiang Kai‐shek's national currency was still circulating freely. 1‐38 History of PBoC • 1948‐1952:  establishment of PBoC and the national banking system – PBoC moved to Beiping (now Beijing) in Feb.1949 – From Sept. 1949, PBoC became directly supervised by the State Council – People’s Republic of China was established in Oct1, 1949 – PBoC’s major functions included money supply, treasury management, stabilizing national financial markets and supporting economy reconstruction after civil war 1‐39 1‐40 History of PBoC • 1948‐1952: the establishment of PBoC and the national banking system – Most private banks went bankruptcy due to the financial regulations by PBoC – PBoC helped transforming private‐owned banks to joint‐owned ones – Foreign banks’ business was halted; foreign currencies were prohibited circulating in China – Others were transformed to joint‐owned (private and government) banks History of PBoC • 1953‐1978: national bank in the planned economy – private banking industry almost disappeared – PBoC served the national institution that governed the whole financial sector and took the banking business – PBoC controlled both the sourcing and employment of capitals in the planned economy – PBoC took the responsibility of organizing and adjusting the money circulation by providing all sources of credits to state‐owned firms, joint‐ owned firms and even individuals. 1‐41 History of PBoC • 1979‐1992: transition from a national bank to the central bank – In 1978, China began to adopt the reform and opening‐door policy – Various forms of financial institution (commercial banks, trusts, insurance companies) came forth, a central bank was necessary for the regulation – In Sept. 1983, State Council decided to have the PBoC function as a central bank with the separation of ICBC 1‐42