Abstract

The international financial crisis that broke out in 2008 made people realized that the stability of financial institutions does not mean the stability of the whole financial system. Macro-prudential management again enters into the academic and decision-making horizons，and the research on this field is also increasing. At the same time，a new round of cross-border capital flows over the world and brings shocks to emerging and developing countries. How to manage cross-border capital flows with macro-prudential methods becomes a hotpot in society，and short-term cross-border capital flows have become one of the focus.

From the existing domestic and foreign literature，researches on short-term cross-border capital flows management focuses on three areas. The first one is the need for short-term cross-border capital flows regulation，that is why it is necessary to regulate short-term cross-border capital flows？ The answers to this question are not dispersion. Most people think that short-term cross-border capital has strong liquidity，short stay time，and variable flow directions，which will impact a country's economic stability and even lead to economic and financial crisis. The second one is the effectiveness of short-term cross-border capital regulation. The existing literature mainly focuses on the impact of short-term cross-border capital regulation on the scale of capital flows，the impact on relevant economic indicators（such as currency growth，fiscal deficit，foreign exchange reserves，interest rate levels，etc.） and the impact on business efficiency. Due to differences in indicator selection，research methods，sample intervals and so on，scholars have not reached consensus in the above three areas yet. The third one is the exploration of macro-prudential supervision of short-term cross-border capital flows in some countries since the international financial crisis. In general，whether it is theoretical research or practical exploration，the macro-prudential management of short-term cross-border capital flows still in the initial stage and needs further research.

Since the reform and opening up，the scale of China's short-term cross-border capital flows has gradually increased with the deepening of market-oriented reforms. The frequency of short-term cross-border capital flows is also accelerating with the degree of economic openness，especially with the increase in the openness of financial and capital accounts. The management of short-term cross-border capital flows has also gradually shifted from the single administrative capital control initially to quantitative control and market regulation. Since the international financial crisis in 2008，China has begun to explore macro-prudential management of cross-border capital flows to prevent and resolve systemic financial risks，short-term cross-border capital flows are also included.

The emergence of the concept of “systemic risk” is mainly due to the growing concern over one country and even cross-border financial risks in the past two decades，however，the scholars have not yet formed a unified understanding of this concept，the more consistent view is that the shock and transmission mechanism are the two key elements that constitute systemic risk. For the financial system，shocks include local and systemic shocks，internal shocks and external shocks. The transmission mechanism is at the core of systemic risk，which can make a local disturbance develop into a systemic risk that affects the whole financial system. From the perspective of domestic and foreign practice，systemic risks in the financial system are mainly generated in the banking system，financial market and payment clearing system. There are two ways in which short-term cross-border capital flows can lead to systemic financial risks：the first is through the inherent procyclicality of financial institutions such as banks，amplifying the cyclical fluctuations of the economy in a short period of time，especially expanding the capital market and asset prices of a country with the magnitude of fluctuations in the economic cycle that resulting in systemic risks，the second is through the systemically important financial institutions，through the huge spillover effects and network transmission effects of systemically important financial institutions，the risks arising from short-term cross-border capital flows are quickly spread to the entire financial system，resulting in systemic financial risks.

The macro-prudential policy combined with systemic risk aims to solve two types of systemic risks，the one is the systemic risk that evolves over time，that is，the procyclicality of financial institutions，and the other is at a given point the systemic risk of network conduction effects formed by business transactions between institutions. The implementation of macro-prudential policies needs to be based on a certain framework，which contents of the framework includes policy objectives，scope of policy implementation，policy tools，and government governance appropriate to it，institutional arrangements，the identification and monitoring of systemic risks，the cost-sharing of systemic risks and policy coordination are also important components of the macro-prudential policy framework.

The objective of macro-prudential management of short-term cross-border capital flows in China is non-unique，consisting of a target system consisting of a final goal and a direct goal. The ultimate goal is to ensure that no systematic financial risks occur and better serve the real economy. Direct objectives include promoting exchange rate stability，optimizing cross-border capital flow structure，promoting full convertibility of RMB capital projects，and further opening of capital accounts and so on. In practice，China mainly uses quantitative tools and administrative tools to regulate short-term cross-border capital flows. For short-term external debts of Chinese-funded enterprises and short-term foreign debts of banks，they use both quantitative and administrative indicators to impose dual constraints，and price-based instruments is still being explored.

As an emerging economy，Turkey's central bank faces the massive flow of short-term cross-border capital，creatively adopting flexible interest rate corridors and reserve option mechanisms，they have better stabilized short-term cross-border capital flows and exchange rate fluctuations，and the useful experience is worth learning from. Historically，Tobin tax has played a role in regulating the cross-border capital flows of emerging economies. Under macro-prudential management，Tobin tax as a price-based tool for regulating cross-border capital flows has inherent logical consistency with macro-prudential management. China can consider it as a tool to regulate short-term cross-border capital flows，includes the gradual implementation of a two-level Tobin tax based on a balanced exchange rate level，and strengthening cooperation between departments and between the countries.

In the short to medium term，the Fed's tightening monetary policy with interest rate hikes and shrinking tables has already affected emerging economies and developing countries，financial markets in some countries have experienced significant turmoil，the international market has once again seen massive capital return to the United States. China's financial market has also been affected，the RMB exchange rate is facing greater depreciation pressure，the stock market has experienced a significant decline，and the short-term cross-border capital outflow pressure also exists. This situation is expected to continue for a period of time，China should attach great importance to it and comprehensively assess the possible impact of the Fed's tightening policy and international market turmoil，and adopt a number of policies，including macro-prudential management.

In the long run，with the further integration of China's economy into the world economic system，financial “going out” will become an important part of China's “going out” economy. Among them，financial institutions' “going out” and RMB internationalization will be the focus. In this process，the scale of short-term cross-border capital flows will increase and the frequency will increase too. Macro-prudential management of short-term cross-border capital flows will help promote better “going out” of China's finance.

Keywords：Macro-prudential；Short-term Cross-border Capital；Systemic Risk；Tobin Tax