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The world’s second-largest economy is helping drive the global recovery. But to sustain high growth and social cohesion, China needs to continue rebalancing its economy by boosting public spending on human capital and social services, and further reforming pensions and health care.
Remarks by Pier Carlo Padoan at the release of the 2010 edition Of Going For Growth on March 10, 2010
Going for Growth 2010 takes stock of recent progress in implementing policy reforms to improve labour productivity and utilisation that were identified as priorities in the 2009 edition.
Central banks have responded with exceptional vigour to the crisis by using their traditional interest-rate tools to their limits and deploying a wide range of unconventional measures.
Despite progress in opening up the financial sector to international investors and in allowing domestic investors to invest abroad, liberalisation has been slow and in most market segments the foreign share remains very small.
Chinese financial institutions are now generally stronger and better regulated than a few years ago and the financial system is gradually opening up. However, further reforms are required.
China’s monetary policy framework has gradually become more market-based. Going forward, it will need to place less emphasis on quantity-based liquidity controls and more on interest rate changes.
U.S. President Barack Obama’s plan to separate core commercial banking from some higher-risk activities in financial conglomerates and to place a moratorium on further consolidation could help to avoid a new financial crisis by resolving some major risks inherent to the current financial system.
Monetary policy and inflation prospects are broadly sound in Israel, but significant challenges remain for fiscal policy in reducing public debt.
The comparatively large magnitude of the losses of the two largest banks of Switzerland in relation to capital has underscored the systemic risks to the economy posed by the institutions’ size relative to Swiss GDP and their extensive cross-border and cross-currency activities.