Similarly, the State Administration of Foreign Exchange (SAFE), the subsidiary of the People’s Bank of China that controls the foreign-exchange transactions of commercial banks and households, derives its power from controlling capital inflows and outflows. Recognizing that progress toward capital-account liberalization would imply its eventual demise, SAFE has made numerous excuses (to which the recent financial crises in the West have lent credence) for retaining tight control over foreign-exchange transactions.