Cover -- Contents -- Acknowledgments -- Foreword -- Introduction -- Overview: China's Road to Greater Financial Stability -- PART I: REFORMING THE FINANCIAL SYSTEM AND ENSURING FINANCIAL STABILITY -- 1 Reform and Development of China's Financial Sector -- 2 Financial Reform: An Essential Ingredient in Transforming China's Economic Development Model -- 3 Strengthening the Financial Stability Framework in China -- PART II: MACROECONOMIC FACTORS AFFECTING FINANCIAL STABILITY -- 4 China's Sovereign Balance Sheet Risks and Implications for Financial Stability -- 5 Systemic Liquidity, Monetary Operations, and Financial Stability in China -- 6 Capital Flows, International Use of the Renminbi, and Implications for Financial Stability -- PART III: STRENGTHENING FINANCIAL SYSTEM OVERSIGHT -- 7 Structure of the Banking Sector and Implications for Financial Stability -- 8 Practical Experiences in Strengthening Banking Supervision and Regulation -- 9 Seeking the Middle Ground for Supervision -- 10 Strengthening Macroprudential Management -- 11 Capital Markets and Financial Stability -- PART IV: OUTLOOK FOR THE FUTURE -- 12 China's Road to Sustainable Growth and Financial Stability: A Systemic Perspective -- 13 Delivering Financial Stability in China -- 14 The Impact of Financial Liberalization on China's Financial Sector -- 15 This Time Is Different: The Domestic Financial Impact of Global Rebalancing -- 16 The Renminbi's Prospects as a Global Reserve Currency -- Afterword -- Index -- A -- B -- C -- D -- E -- F -- G -- H -- I -- J -- K -- L -- M -- N -- O -- P -- Q -- R -- S -- T -- U -- W -- Y -- Z -- Figures -- Figure 1.1 Total Assets of Large Commercial Banks -- Figure 1.2 Nonperforming Loan Ratios of Large Commercial Banks -- Figure 1.3 Total Assets of Rural Credit Cooperatives -- Figure 1.4 Owners' Equity of Rural Credit Cooperatives.

Figure 1.5 Capital Adequacy Ratio of Rural Credit Cooperatives -- Figure 1.6 Nonperforming Loan Ratios of Rural Credit Cooperatives -- Figure 1.7 Total Assets in the Financial Sector -- Figure 1.8 Outstanding Bond Balances and Their Ratios to GDP -- Figure 1.9 Bond Issuance -- Figure 1.10 U.S. Dollar to Renminbi Exchange Rate -- Figure 1.11 Daily Fluctuation Range of the Renminbi to U.S. Dollar Exchange Rate -- Figure 2.1 Saving Decomposition -- Figure 2.2 Sterilization by the People's Bank of China -- Figure 2.3 House hold Consumption -- Figure 2.4 Average Employment Growth, 2004-10 -- Figure 2.5 Imputed "Subsidy" to Capital -- Figure 2.6 Social Financing -- Figure 2.7 Private Credit -- Figure 2.8 Real Interest Rates -- Figure 2.9 Distribution of the Returns to Bank-Intermediated Capital -- Figure 2.10 Real Cost of Capital, 2005-09 -- Figure 2.11 Exchange Rate and Foreign Reserves -- Figure 2.12 Short-Term Interest Rates -- Figure 2.13 Inflation and the Deposit Rate -- Figure 4.1 Size and Composition of China's Sovereign Assets -- Figure 4.2 Size and Composition of China's Sovereign Liabilities -- Figure 4.3 China's Sovereign Assets, Liabilities, and Net Worth -- Figure 4.4 China: Bonds and Loans -- Figure 4.5 China: Debt Level by Sector -- Figure 5.1 China: Benchmark Deposit Rate Structure -- Figure 5.2 China: Benchmark Lending Rate Structure -- Figure 5.3 China: Structural Liquidity and Foreign Reserves -- Figure 5.4 Structural Liquidity and the People's Bank of China Sterilization Policy -- Figure 5.5 Composition of Policy Sterilization -- Figure 5.6 China: Interest Rate Structure -- Figure 5.7 China: Interbank Funding -- Figure 5.8 China: Estimated Excess Reserve Ratios -- Figure 5.9 China: Bank Reserves -- Figure 5.10 China: Responses to an Increase in the Total Excess Reserves Ratio -- Figure 5.11 China: Responses to an Increase in the Spread.

Figure 5.12 China: Flow of Funds in the Interbank Market-Repos -- Figure 5.13 China: Flow of Funds in the Interbank Market: Call Loans -- Figure 5.14 China: Interbank Repo Turnover -- Figure 5.15 China: Interbank Overnight Funding Rates -- Figure 5.16 China: Interbank Collateralized Repo Rates -- Figure 5.17 China: Bond Market Bid-Ask Spreads, April 2010 to June 2011 -- Figure 5.18 China: Trea sury Bond Yield Curves -- Figure 5.19 China: Interbank and Exchange Market Yield Curve Crossing -- Figure 6.1 China: Estimated Unrecorded Capital Flows -- Figure 6.2 Government Bond Yield -- Figure 6.3 Impulse Responses from Vector Autoregressions, 2005-10 -- Figure 7.1 Size of Selected Countries' Financial Systems, end-2011 -- Figure 7.1.1 Credit Channel in China -- Figure 7.2 Banking System Assets by Type of Bank, end-2011 -- Figure 7.3 Select Banking Systems' Aggregate Deposits, end-2011 -- Figure 7.4 Real Deposit Rates in Select G20 Countries -- Figure 7.5 Demand Deposits and Returns on the Shanghai Stock Exchange -- Figure 7.6 Household Real Deposit Rate and Returns on the Shanghai Stock Exchange -- Figure 7.7 Typical Structure of Local Government Financing Platforms -- Figure 11.1 Breakdown of Overall Funding Provided to Real Economy in 2011 -- Figure 11.2 Breakdown of Financial Assets as of end-2011 -- Figure 11.3 Breakdown of the Financial Assets Owned by Chinese Residents as of end-2010 -- Figure 11.4 Market Capitalization of Stocks and Bonds -- Figure 11.5 Equity Market in China -- Figure 11.6 Breakdown of Shareholders in the A-Share Markets as of end-2011 -- Figure 11.7 Breakdown of Transactions in the A-Share Markets by Investor Category, 2011 -- Figure 11.8 Month-end Average Price-Earnings Ratio of Shanghai Stock Exchange -- Figure 14.1 Forecast of China's Credit Market -- Figure 14.2 Composition of International Investment Position.

Figure 14.3 China's Underdeveloped Asset Management Industry -- Figure 15.1 Commercial Bank Nonperforming Loan Ratio -- Figure 15.2 GDP, Central Bank Assets, and Bank Assets -- Figure 15.3 Trade Surplus and Net Foreign Exchange Inflows (12-month rolling) as a Share of Total Bank Assets -- Figure 15.4 The People's Bank of China Bills Outstanding -- Figure 15.5 Percent Increases in Fixed-Asset Investment and Deposits -- TABLES -- TABLE 4.1 Sovereign Balance Sheet of China, 2010 -- TABLE 4.2 International Comparison of China's Debt Structure and Overall Leverage Ratio -- TABLE 5.1 China: Aggregated Bank Balance Sheet -- TABLE 5.1.1 Stylized People's Bank of China Balance Sheet -- TABLE 6.1 Top Five Contributors to Global Financial Depth -- TABLE 7.1 Ownershipof Large Commercial Banks, end-2011 -- TABLE 11.1 Combined Market Capitalization by Market -- TABLE 11.2 Various ServiceProviders in the Capital Markets, end-August2012 -- TABLE 11.3 A-Shares Held by Foreign Shareholders, end-2011 -- TABLE 11.4 Capital Market Priorities and Reform Measures -- APPENDIX TABLE 11.1 Bonds under Custody in China's Bonds Markets in August 2012 -- APPENDIX TABLE 11.2 Trading in China's Futures Derivatives Markets, 2011 -- TABLE 14.1 Financial Intermediation Structure -- TABLE 14.2 Comparison of Bank Net Interest Margins in the Asia Pacific Region -- Boxs -- Box 5.1 What Is Liquidity? -- Box 7.1. The Credit Channel in China.