The double-pillar macro control.........>

CHINA PRESS: The double-pillar macro control framework, composed of monetary

policy and macro-prudential policy, will be improved to maintain financial

stability, reported the Financial News, citing officials and analysts. 

 - The monetary policy anchors CPI to smooth economic cycles, while the

macro-prudential policy will be pegged to broad credit and property prices. 

 - The macro-prudential policy will focus on regulating banking institutions,

including their leverage ratio, liabilities structure, and cross-border capital

flight. 

 - Non-banking institutions - including their businesses such as wealth

management products, fin-tech and shadow banking - will also be regulated, said

Chen Ji, senior researcher of Bank of Communication.  

***COMMENT: Commercial banks need to reduce interbank liabilities and contract

assets to meet strict regulation. This will cut down the total amount of

negotiable certificates of deposit, and reduce fierce competition in attracting

general deposits. Liquidity pressure will increase, particularly during

regulatory periods, such as the ends of financial quarters.