2016/9/20 History of PBoc History of PBoc 1979-1992: transition from a national bank to the 1993-present: reinforce and complete the role of central bank PBoc took the status of central bank from Jan 1st, Commercial banking and policy banking gradually striped since 1993 Focused on setting and implementing monetary The Law of the people's Republic of china on the policy, controlling the total amount of credit and People's Bank of China passed by the third stabilizing commodity prices Plenum of the Eighth National People's Congress Lending and depository business was transferred on March 18, 1995, legally confirmed the Pocs to Industrial and Commercial Bank of china central bank status The required reserve and rediscount rate system (lending to specialized banks)was set up History of PBoc Functions of pboc 993-present: reinforce and complete the role of central bank CSRC and CIRC established in 1992 and 1998 security and insurance regulatory function of The draft amendment of Law on the people's Bank of China passed on Dec 22, 2003 Under the guidance of the State Council, the Pboc CBRC established in 2004 to supervise the ormulates and implements monetary policy financial industry prevents and resolves financial risks, and safegua financial stability. PBoCs Required Reserve Ratio PBoC's Required Reserve Ratio (1984-2003) (2003-2016) red Reserve ratio 11984 Resident Deposit 40 1985--1986 31987—-sept1988 Sept 1988--Mar 1998 Mar1998--Nov19992016/9/20 8 History of PBoC • 1979‐1992: transition from a national bank to the central bank – PBoC took the status of central bank from Jan 1st, 1984 – Focused on setting and implementing monetary policy, controlling the total amount of credit and stabilizing commodity prices   – Lending and depository business was transferred to Industrial and Commercial Bank of China – The required reserve and rediscount rate system (lending to specialized banks) was set up 1‐43 History of PBoC • 1993‐present: reinforce and complete the role of central bank – Commercial banking and policy banking gradually striped since 1993 – The Law of the People's Republic of China on the People's Bank of China passed by the Third Plenum of the Eighth National People's Congress on March 18, 1995 , legally confirmed the PBoC's central bank status 1‐44 History of PBoC • 1993‐present: reinforce and complete the role of central bank – CSRC and CIRC established in 1992 and 1998, security and insurance regulatory function of PBoC striped; – The draft amendment of Law on the People‘s Bank of China passed on Dec 22, 2003 – CBRC established in 2004 to supervise the financial industry 1‐45 1‐46 Functions of PBoC • Under the guidance of the State Council, the PBoC formulates and implements monetary policy, prevents and resolves financial risks, and safeguards financial stability. PBoC’s Required Reserve Ratio (1984‐2003) Year Required Reserve Ratio 1 1984 Corporate Deposit 20% Village Deposit 25% Resident Deposit 40 2 1985——1986 10% 3 1987——Sept 1988 12% 4 Sept 1988——Mar 1998 13% 5 Mar 1998——Nov 1999 8% 6 Nov1999——Sept 2003 6% 1‐47 1‐48 PBoC’s Required Reserve Ratio (2003‐2016) 6% 8% 10% 12% 14% 16% 18% 20% 22%