The People's Bank of China: We will continue to promote the transformation of the monetary policy regulation framework, placing greater emphasis on the role of price-based regulation

The central bank released the China Monetary Policy Implementation Report for the third quarter of 2025. In "Column 2," it was stated that in the long run, the accelerated development of China's financial market, the growth of direct financing, and changes in the financing structure have profound impacts on the total money supply and financial regulation. As the financial market continues to develop and financial products become increasingly diverse, enterprises and residents can use deposits to purchase financial assets such as wealth management products and stocks based on changes in the returns of various assets. Changes in asset prices often lead to variations in the total amount and structure of bank deposits and loans, causing disturbances to the monetary creation of the banking system and the broad money supply (M2). In the future, it is necessary to continue promoting the transformation of the monetary policy regulation framework, placing greater emphasis on the role of price-based regulation. By continuously deepening interest rate marketization reforms, clarifying the transmission relationship of interest rates from short to long and the comparative relationship of different asset yields, the effectiveness of interest rates in adjusting the financial resource allocation mechanism can be fully utilized, thereby stabilizing the effectiveness of financial support for the real economy