China's central bank governor Zhou Xiaochuan said on Saturday that actions are needed to boost the global economy and the governance reform of the International Monetary Fund (IMF) should be finished without delay.
In a statement made at the meeting of the International Monetary and Financial Committee, the IMF's policy-setting arm, Zhou, governor of the People's Bank of China, said the global economy remained fraught with challenges despite some encouraging signs over the last six months.
"To achieve sustainable recovery and safeguard financial stability, further policy progress is called for in the advanced economies," he told the IMF panel. "Although unconventional monetary policies in major advanced economies have helped stabilize financial markets and foster economic recovery, it is necessary to reevaluate the marginal benefits and costs of such policies after multiple rounds of monetary easing."
Zhou said policymakers in advanced economies should also be mindful of the spillover effects of these policies, such as more volatile capital flows, exchange rates, and commodity prices.
"Prolonged easing could exacerbate the financial vulnerabilities and affect the stability of the international monetary system," he warned, who also reminded the emerging market and developing economies to remain "vigilant against domestic vulnerabilities."
The Chinese central bank chief also said it is imperative not to further delay the IMF 2010 quota and governance reform. He urged IMF members that have not to ratify the reform package to do so as soon as possible.
Meanwhile, Zhou called for efforts to reach an agreement on a new quota formula and cooperation to complete the 15th General Review of Quotas of the IMF by January 2014.