CHINA’S central bank said Tuesday it would improve the framework of regulation underpinned by monetary policy and macro-prudential policy in 2018.

The improvements will be made partly by stepping up supervision over shadow banking and real estate financing to fend off financial risks, the People’s Bank of China (PBOC) said on its website after concluding an internal work conference.

The central bank also said it would improve Internet financial regulation, stating that one of its main tasks for 2018 was to establish and improve a long-term mechanism for Internet financial regulation and risk prevention.

The PBOC will comprehensively use multiple monetary policy tools and realize reasonable growth in credit and social financing, the statement added.

The central bank also said it would maintain a prudent and neutral monetary policy, and direct more capital into key economic areas and weak links, such as rural vitalization and poverty relief.

More efforts will be made to improve the disposal of bond defaults, and unify rules on approval and information disclosure of corporate credit bond issuance.

The central bank also listed financial services in home rentals, the establishment and improvement of a long-term mechanism for supervising online finance, risk prevention, and the opening up of the bond market as important tasks this year.

Such a regulation, known as a “two-pillar” policy framework, was established in 2017 to better dissolve systemic risk and ensure financial stability. Under the system, liquidity has stabilized, cross-border capital flow more balanced and off-balance sheet wealth management products better supervised.

It is the second year that the Chinese Government has launched a deleveraging campaign to reduce financial risks rooted in a rapid build-up of debt and riskier types of financing, and is proceeding cautiously to avoid any sharp blows to economic growth.

(SD-Xinhua)