Pan Gongsheng: strengthening macro Prudential Management is the core content of international financial regulatory reform

category:Finance
 Pan Gongsheng: strengthening macro Prudential Management is the core content of international financial regulatory reform


A number of macro prudential policies stick to the bottom line of risks

The exploration and practice of macro Prudential policy in China started earlier.

Macro Prudential Management has always been highly valued. The fifth national financial work conference in 2017 proposed that we should take the prevention of systemic financial risks as the bottom line to strengthen the construction of macro Prudential Management System; the report of the 19th National Congress of the Communist Party of China proposed that we should improve the dual pillar regulatory framework of monetary policy and macro Prudential policy.

In order to promote the supervision of systemically important financial institutions, the guidance on improving the supervision of systemically important financial institutions issued in November 2018 established the macro policy framework for the supervision of systemically important financial institutions in China.

Under the framework of the overall system, the central bank, together with the CBRC, has formulated and is in the process of formulating the assessment measures for systemically important banks and the additional regulatory provisions for systemically important banks.

The measures for the evaluation of systemically important banks has established the evaluation index system of Chinas systemically important banks. At present, the public consultation has been completed and will be released in the near future. Pan Gongsheng said that after the above measures and rules were issued, the list of Chinas systemically important banks and supporting additional regulatory implementation plans would be released in a timely manner.

In addition, in the practice of macro Prudential Management in key areas, pan Gongsheng said that the central bank should study macro Prudential policy tools such as the concentration of real estate loans, the ratio of residents debt to income, and the weight of real estate loan risk to further improve the long-term mechanism for promoting the healthy development of the real estate market System.

How to improve the macro Prudential framework in the next step?

According to the statistics of the international financial association, by August 2020, 33 countries and regions, including G20 members, have implemented more than 500 Prudential policy measures for the banking sector to cope with the impact of the epidemic. Among them, the policy measures with macro Prudential characteristics accounted for about 60%.

Compared with monetary policy, the theory and practice of macro Prudential policy in various countries has not started yet, and the policy framework is still improving. In recent years, China has continuously improved the macro Prudential policy framework and actively adopted a number of policy measures.

Pan Gongsheng stressed that in the next step, the central bank will mainly improve relevant policies in four aspects.

First, we should continue to improve the macro Prudential policy framework, including timely release of the macro Prudential policy guidelines, and improve the overall design and governance mechanism of Chinas macro Prudential policy. We will continue to strengthen macro Prudential Management in key areas, constantly enrich the macro Prudential policy toolbox, and develop mechanisms for the use, calibration and exit of tools.

The second is to improve the systematic risk monitoring and evaluation system. We will focus on improving the macro Prudential monitoring, evaluation and early warning system in key areas such as real estate finance, foreign exchange market, bond market, shadow banking and cross-border capital flow, and implement and institutionalize the macro Prudential stress test step by step. Third, strengthen the supervision of systemically important financial institutions and financial holding companies. We should strengthen the supervision of systemically important banks, establish a macro Prudential Management Framework for Chinas systemically important insurance institutions and securities institutions, formulate plans for the recovery and disposal of systemically important financial institutions, improve the supporting rules for the supervision of financial holding companies, and carry out the access management and continuous supervision of financial holding companies in a stable and orderly manner in accordance with the law. Fourth, we should coordinate macro prudential policies with other policies. We should strengthen the coordination and coordination of macro Prudential policy, monetary policy and micro prudential supervision policy, give full play to the policy joint force, strengthen the coordination and coordination of macro Prudential policy with fiscal policy, industrial policy and credit policy, and enhance the ability of financial services to the real economy. Source: editor in charge of Finance and Economics: Zhong Qiming_ NF5619

The second is to improve the systematic risk monitoring and evaluation system. We will focus on improving the macro Prudential monitoring, evaluation and early warning system in key areas such as real estate finance, foreign exchange market, bond market, shadow banking and cross-border capital flow, and implement and institutionalize the macro Prudential stress test step by step.

Third, strengthen the supervision of systemically important financial institutions and financial holding companies. We should strengthen the supervision of systemically important banks, establish a macro Prudential Management Framework for Chinas systemically important insurance institutions and securities institutions, formulate plans for the recovery and disposal of systemically important financial institutions, improve the supporting rules for the supervision of financial holding companies, and carry out the access management and continuous supervision of financial holding companies in a stable and orderly manner in accordance with the law.

Fourth, we should coordinate macro prudential policies with other policies. We should strengthen the coordination and coordination of macro Prudential policy, monetary policy and micro prudential supervision policy, give full play to the policy joint force, strengthen the coordination and coordination of macro Prudential policy with fiscal policy, industrial policy and credit policy, and enhance the ability of financial services to the real economy.