The Tsinghua – St. Louis Federal Reserve Bank Monetary Policy and Financial Stability Conference was held on May 21st and 22nd, 2016 at PBC School of Finance, Tsinghua University. The conference is hosted by ZHOU Hao, associate dean and UniGroup Chair Professor at Tsinghua PBCSF. On issues of Monetary Policy System, American Monetary Policy Normalizations and etc, YI Gang, deputy governor of the People's Bank of China, WU Xiaoling, dean of Tsinghua PBCSF, James Bullard, chairman of St. Louis Federal Reserve Bank gave keynote speeches at the conference.
Dean WU Xiaoling believes the negative interest rate, which will deprive from currency owners, do harm to Banks’ balance sheet, play a negative factor in deposit growth and real economy’s financing, and certainly have boundaries, may not be as perfect as the supporters expected. YI Gang joined a deep conversation with scholars presented around the issue of the transformation of China’s Monetary Policy System. James Bullard believes that through a very slow process, the Federal Open Market Committee is raising the monetary market interest rate to the lower limit of zero interest rate.
The economic experts expressed their views on Chinese and American monetary policies and economic conditions. BAI Chong’en, associate dean of Tsinghua University School of Economics and Management and member of Monetary Policy Committee, said that under the full employment, the cost of employment is rising while China’s particular investment structure has also led to a raise in the cost of financing activities. The two factors are causing the decrease in private enterprises’ willingness to invest. MA Jun, chief economist from the People’s Bank of China, shared his view on China’s liquidity and high leverage. He believes the main cause of high leverage is that the real estate industry and state owned companies are absorbing too much capital. Speaking from economic figures, some positive signs have shown in the manufacture industry in the past season. In regard to financial supervision, Darrel Duffie, professor from Stanford, thinks there must be clear job-division and accountability mechanism for the supervisors. The future reformation of financial regulators will be emphasizing on integrated supervision on Systematic Important Financial Institutions (SIFI).
Besides policy discussions, the conference published 8 frontier academic theses. The conference is hosted by Tsinghua University PBC School of Finance, Tsinghua University National Institute of Financial Research, Tsinghua University School of Economics and Management, Tsinghua University China Institute of Fiscal and Taxation and St. Louis Federal Reserve Bank.