Center for Pacific Basin Studies

The Center for Pacific Basin Studies promotes cooperation among central banks in the Pacific Basin and provide insight into and analysis of economic policy issues affecting the region.

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Pacific Basin Notes

Occasional series of the FRBSF Economic Letter

Reserve Requirements as a Chinese Macro Policy Tool

2017-15

Zheng Liu and Mark M. Spiegel | May 22, 2017

China’s central bank frequently adjusts its reserve requirements for commercial banks as a way to stabilize economic fluctuations. These adjustments affect the overall credit supply but can also lead to the reallocation of credit and capital. Evidence shows that increases in reserve requirements raise off-balance-sheet lending, which typically benefits China’s more productive private sector, at the expense of on-balance-sheet loans to less productive state-owned enterprises. Under certain conditions, reserve requirements can be a useful additional policy instrument for improving resource allocations and also for macroeconomic stabilization in China.

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Working Papers

China’s Financial Linkages with Asia and the Global Financial Crisis

FRBSF Working Paper 2013-12

Glick • Hutchison | May 2013

This paper presents empirical evidence on how asset market linkages between China and Asia shifted during and after the global financial crisis of 2008-2009. We find only weak cross-country linkages in longer-term interest rates, but much stronger linkages in equity markets. We also find that the strength of the correlation of equity price changes between China and other Asian countries increased markedly and has remained high in recent years.

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Conferences

2017 Asia Economic Policy Conference

November 16 - November 17, 2017
Center for Pacific Basin Studies, Federal Reserve Bank of San Francisco | San Francisco, California

Conference organizers invite research paper submissions by March 15 along the theme of “Monetary Policy Challenges in a Changing Global Environment.”

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