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BEIJING, Nov. 26-- While the market debates China's latest round of economic growth, national regulators are focusing on an equally important factor of the economy: financial cycles. In its latest quarterly monetary policy implementation report, the People's Bank of China (PBOC) devoted a special column to this concept, describing it as an "increasingly significant issue" that should be dealt with macro-prudential approaches to prevent systemic risks. "While traditional monetary policy can address instability during economic cycles, it is not effective enough to balance controls on economic cycles and financial ones, which are caused by the expansion and contraction of financial variables," the central bank said. The global financial crisis showed that traditional economic indicators, like GDP growth and the inflation rate, were not necessarily linked with financial stability. Before the U.S. subprime mortgage crisis in 2007, though the global economy was on a strong rise with steady inflation, skyrocketing stock markets and house prices sowed the seeds of the crisis. "When economic and financial cycles do not move in sync, they may lead to different or even adverse effects, thus making macro-policies conflicting and ineffective," the PBOC report said. The central bank's concern is in line with many other governments and international institutions, who warn that the ups and downs of financial cycles may span economic ones, and could even lead to a future crisis. | 
