Q:We frequently hear the central bank and the State Administration of Foreign Exchange (SAFE) speak of macro-prudential policy framework or macro-prudential management.  How did these terms come about and what exactly do regulators mean when they use the terms?

A:Since the financial crisis broke out in the United States in 2008，government agencies around the world，especially central banks，have been rethinking how they identify risks in a timely manner. They need to cope with crises and reduce risks in an open economic environment. Such issues need to be addressed by macro-controls and financial supervision. The concept of a macro-prudential framework or management is used in this context. It is，however，something that continues to generate a good deal of discussion.

So what sort of regulatory activities would you say come under the concept of macro-prudential management?

I am afraid there is no precise definition. The concept of macro-prudential management is still a work in progress. At present，there is neither sufficiently mature international experience nor a fixed domestic model to be used as a reference. In academic circles and among regulators there are various explanations as what measures are covered by these terms，such as counter-cyclical management，the use of the so-called Tobin tax，withholding deposits，the variable function increase and the like. I don't believe there is a universally agreed on definition. However，the main objective of these policy measures is to prevent systemic financial risks. That much is clear.