The information volume of this meeting is huge, especially for the news of multi-channel promotion of the effective conversion of household savings into long-term capital market funds swiped on the screen at the end of last week, the relevant head of the CBRC made a detailed explanation to clarify the market misreading. At the same time, the relevant persons in charge of the CIRC also responded to the hot issues concerning the banking and insurance industry involved in the opinions, such as increasing support for advanced manufacturing industry, the reform of the joint stock system of rural credit cooperatives, the disposal of problematic financial institutions, and the replenishment of bank capital.
Key point 1: cultivate institutional investors in the capital market
The opinion points out that we should give full play to the important role of bank insurance institutions in optimizing the financing structure. Banking and insurance institutions should improve the service system suitable for the development of direct financing, provide supporting support for direct financing in various ways, and increase the proportion of direct financing. Give full play to the direct financing function of financial management, insurance, trust and other products, cultivate the concept of value investment and long-term investment, and improve the structure of investors in the capital market. Vigorously develop enterprise annuity, occupational annuity, all kinds of health and endowment insurance businesses, and promote the effective transformation of residents savings into long-term capital market funds through multiple channels. All kinds of qualified investment institutions are encouraged to participate in the market-oriented and legal debt to equity swap.
How to correctly understand the multi-channel promotion of effective conversion of household savings into long-term capital market funds? Does this mean that retail investors will enter the market directly? In this regard, Xiao Yuanqi explained that in Chinas financing structure, the proportion of indirect financing is relatively high and the proportion of direct financing is relatively low. The central government has repeatedly proposed to develop a multi-level capital market, and the key policy consideration is mainly to cultivate institutional investors in the opinion of promoting the effective conversion of household savings into long-term capital market funds. For example, in the United States and the United Kingdom, where direct financing is developed, household savings are mainly invested in the financial market through pension funds, mutual funds and other financial products. In other words, part of the funds of institutional investors are from residents savings. Institutional investors can allocate bonds, stocks and other assets according to their own investment strategies, rather than simply let residents savings directly invest in the stock market.
Ye Yanfei stressed that the capital market refers to both the stock market and the equity market, as well as the bond market with a maturity of more than one year. He pointed out that resident savings is the concept of national economic accounting, which refers to the surplus part of the income of the resident sector after consumption, which can enter the financial market in the form of various financial products. In the past, most of the household savings entered the financial market in the form of bank deposits, which formed indirect financing; in the future, the household savings may increase the investment in financial management, trust, insurance and other financial products, and these funds will form direct financing when entering the financial market, so as to balance the proportion of indirect financing and direct financing.
At the same time, Xiao Yuanqi stressed that for individual and enterprise fund holders, their savings funds can be invested not only in bank deposits, but also through entrusted investment, purchase of financial management, bonds or stocks. The specific use of funds is completely determined by their own risk preference and income preference.
Point 2: encourage banks and insurance institutions to increase their support for manufacturing industry
The opinions has made detailed deployment in many aspects in improving the service of the banking and insurance industry to the real economy. Generally speaking, these plans are highly consistent with the policies currently implemented, but they are also prominent in some real economy fields. For example, the opinion is more concerned about the bank insurance industrys increasing support for strategic emerging industries and advanced manufacturing industries.
According to the opinions, we should actively develop financial products that support strategic emerging industries, advanced manufacturing industries and technological innovation. We will expand medium - and long-term loans to strategic emerging industries and advanced manufacturing industries, encourage insurance funds to invest in industrial funds through market-oriented methods, and increase support for strategic emerging industries and advanced manufacturing industries. We will support banking financial institutions to grant medium - and long-term technology R & D loans with intellectual property as pledge to science and technology enterprises, and pilot medium - and long-term credit loans for innovation and Entrepreneurship of high-end talents selected in the national talent plan. We will encourage insurance institutions to innovate and develop science and technology insurance, and promote the pilot of the first set of insurance for major technical equipment and the first batch application of insurance compensation mechanism for new materials.
It is worth noting that in order to guide the banks to expand the medium and long-term loans to advanced manufacturing industry, the central bank recently added indicators such as medium and long-term loans and credit loans to the macro Prudential assessment (MPA), and the CBRC will also take actions. According to Xiao Yuanqi, the CBRC is studying and formulating the evaluation indicators for medium and long-term loan delivery in the manufacturing industry, including the growth rate of manufacturing loan cannot be lower than the average loan growth rate, but other indicators are not excluded.
Since last year, substantial progress has been made in the disposal of problematic financial institutions. There are also voices in the market calling on the regulatory authorities to establish a clear resolution mechanism for problem financial institutions as soon as possible. Ma Jun, director of the center for financial and Development Research of Tsinghua University and member of the monetary policy committee of the central bank, suggested that China should establish a systematic financial risk intervention mechanism, including the establishment of a financial risk early warning level system and a hierarchical response intervention mechanism, and be prepared for the intervention in advanceu201c Menu , list of institutions that may need to be intervened and process of intervening problem institutions.
So, whats the latest progress of the current regulatory authorities in establishing the resolution mechanism of problematic financial institutions? According to Xiao Yuanqi, the regulatory authorities have formulated relevant guidance on the disposal of problematic financial institutions, but at present the whole disposal mechanism is still in the process of exploration, which needs constant exploration and improvement.
The opinions put forward seven disposal methods, including direct capital injection and reorganization, interbank acquisition and merger, etc., but in practice, financial institutions dealing with problems may not only use one mode, but we are also constantly exploring and learning from foreign experience. Xiao Yuanqi said that the resolution mechanism of problem financial institutions should be explored, standardized and improved at the same time. At the same time, considering the rapidity of financial risk, on the one hand, we should follow the rule of law, on the other hand, we should be decisive and fast.
It is worth noting that the opinions not only put forward specific plans for the safe promotion of the disposal of problematic financial institutions, but also made arrangements for deepening the reform of small and medium-sized banks, which complement each other. The opinion points out that it is necessary to strengthen the financial service capacity of local small and medium-sized banks. Urban commercial banks should establish a prudent management culture, reasonably determine the operation radius, and serve local economy, small and micro enterprises and urban and rural residents. Rural small and medium-sized banks should adhere to the orientation of supporting agriculture and supporting small markets, enhance county service functions, support the strategy of rural revitalization, and help win precise poverty alleviation. On the premise of maintaining the overall stability of the legal person status in the county, the Rural Credit Union and the rural cooperative bank should be reformed under the joint-stock system according to local conditions.
Xiao Yuanqi explained that deepening the reform of small and medium-sized banks not only refers to the disposal of problem financial institutions, but also includes the reform and transformation of well run financial institutions. In the past, some local small and medium-sized banks tend to expand rapidly, operate across regions and base large households. The opinions clearly defined the operation orientation of local small and medium-sized banks, which also learned from the past experience and lessons. Next, the CBRC will promote the reform of the Provincial Association, but the reform will adopt a diversified mode according to local conditions.
Key point 4: refine the triggering conditions for write down and share transfer of bank capital replenishment tools and strictly implement them
In terms of shadow banking governance, China has reduced the size of high-risk shadow banks by nearly 16 trillion in the past three years, which has also been highly recognized by international institutions including Moodys, Fitch and the International Monetary Fund.
Xiao pointed out that the determination of regulators to continue to manage high-risk shadow banks will not change. The Opinions also proposed to gradually clean up and compress the non-standard asset investment of off balance sheet financial management, investment of specific purpose carriers on the balance sheet, inter-bank financial management and other business scale, and strictly control the bank credit channel business. Consistent, penetrating and full coverage risk management shall be implemented according to the nature of the business, and the corresponding requirements for risk classification, capital occupation and provision provision shall be strictly applied.
However, Xiao also stressed that not all shadow banking businesses are bad. The governance of shadow banking is a key area, focusing on high-risk, non-compliance and random channel shadow banking business.
In addition, in order to enhance the ability to resist risks, the opinions proposed that banks and insurance institutions should formulate medium and long-term capital planning, supplement capital through multiple channels, and innovate capital supplement tools in accordance with laws and regulations. For the insurance institution, the original equity shall share the losses reasonably in accordance with the law by means of reduction of shares, deduction of future earnings, etc., other specific creditors rights with loss absorption function shall be written down or converted into shares, and the salary and bonus delayed by senior executives and relevant responsible persons shall be deducted in accordance with the law.