Adhere to the combination of domestic practice and international experience
The central bank said that strengthening macro Prudential Management and systemic financial risk prevention, coordinating the supervision of systemically important financial institutions, financial holding companies and important financial infrastructure, overall responsibility for comprehensive statistics of the financial industry, and increasing penalties for financial violations are new requirements for the PBC to perform its duties, which need to be fully reflected in the law of the peoples Bank of China for reform Do a good job in legal protection.
On the general idea of amending the law of the peoples Bank of China, the central bank said: first, we should adhere to the combination of domestic practice and international experience. Second, we should always adhere to the problem orientation and ensure that the reform is targeted. Third, adhere to the policy orientation of marketization and legalization.
The main responsibilities of the central bank were increased from 13 to 19
The revision of the law of the peoples Bank of China mainly includes eight aspects. Specifically, the first is to emphasize financial services to the real economy and strengthen financial macro-control.
Promoting financial services to the real economy is clearly written into the legislative purpose of the draft, which guides the financial system to return to the fundamental position of serving the real economy. In order to better carry out financial macro-control and serve the high-quality development of Chinas economy, the draft defines the responsibilities of the peoples Bank of China in formulating and implementing macro prudential policies from the overall perspective, so as to enhance the effectiveness of the supervision of monetary policy and credit policy.
In elaborating the legislative purpose, the draft for comments states that this law is formulated in order to establish the status of the peoples Bank of China, clarify its responsibilities, ensure the correct formulation and implementation of the national monetary policy and macro Prudential policy, establish and improve the macro-control system of the central bank, maintain financial stability, and promote financial services to the real economy.
The second aspect is to implement the new responsibilities and requirements of the CPC Central Committee and the State Council for the peoples Bank of China.
Specifically, the draft specifies the responsibilities of the central bank in drafting major laws and regulations for the financial industry, formulating the basic system of prudential supervision, taking the lead in the prevention and emergency response of systemic financial risks, three overall plans, and organizing and implementing the national financial security review.
In terms of coordination mechanism, the draft clearly states that the financial stability and Development Commission of the State Council will coordinate the financial reform, development and stability. The office of the financial stability and Development Commission of the State Council is set up in the peoples Bank of China to coordinate the establishment of central and local financial supervision, risk management, protection of financial consumer rights and interests, and information sharing.
The third aspect of the revision is to establish a dual pillar regulatory framework of monetary policy and macro Prudential policy.
On the one hand, the draft improves the monetary policy toolbox, moderately increases the flexibility of monetary policy tools, and ensures the scientific, reasonable and effective regulation and control of monetary policy.
Specifically, the loan to commercial banks is revised to provide loans to commercial banks, rural credit cooperatives, rural cooperative banks, policy banks and development banks in the revised draft. Open market operation has been revised to buy and sell treasury bonds, other government bonds and financial bonds and foreign exchange on the open market in the revised version.
In addition, in order to fill the institutional gap of macro Prudential policy, the draft establishes a macro Prudential policy framework, clarifies the macro Prudential policy objectives, focuses on strengthening counter cyclical regulation and penetrating supervision, and improves the macro Prudential policy toolbox of financial institutions such as counter cyclical capital buffer, risk reserve and stress test.
Financial holding companies are supervised by the central bank
With the implementation of financial holding companies and other important regulatory documents, the draft improves the overall supervision system of systemically important financial institutions, financial holding companies and important financial infrastructure.
Among them, the draft defines the assessment, identification, monitoring and analysis of systemically important financial institutions, consolidated supervision and the formulation and implementation of recovery and resolution plans. Clarify the approval and regulatory provisions of financial holding companies. To clarify the construction planning, identification, inspection, evaluation and supervision of important financial infrastructure.
In addition, the draft also improved the provisions on the comprehensive statistical management and information submission of the financial industry.
The draft also improved the peoples Bank of Chinas means of performing its duties and increased the punishment for financial violations. In view of the low cost of illegal activities in the financial market, the draft for comments has increased the penalties for financial violations, which stipulates that serious violations can be punished with a maximum fine of 20 million yuan; the institutions licensed by the peoples Bank of China will be ordered to suspend business, revoke their licenses, and ban market access
At the same time, the draft clearly states that the peoples Bank of China will further play its role in maintaining financial stability and preventing and handling systemic financial risks.
It is worth mentioning that the central bank has given a clear response to the hot issues concerning the peoples Bank of China Law in the draft for comments.
Among them, in improving the management of RMB, the draft stipulates that RMB includes physical form and digital form, providing legal basis for issuing digital currency, preventing the risk of virtual currency, and making it clear that no unit or individual is allowed to make and sell digital token.
No unit or individual may make or sell token bills and digital tokens to replace RMB in circulation on the market. The draft is clear.
In the past two years, whether or not the central bank can or should not directly purchase treasury bonds has been one of the hot topics among economists.
In this regard, when improving the governance system of the peoples Bank of China, the draft for comments clearly states that the peoples Bank of China will continue to adhere to the principle that the peoples Bank of China does not directly subscribe for or underwrite treasury bonds and other government bonds, and does not provide loans to local governments. As for the prohibition of loans, the draft for comments clearly stipulates that the peoples Bank of China shall not overdraft the governments finance, nor directly subscribe for or underwrite national bonds and other government bonds. In addition, the peoples Bank of China shall not provide loans to local governments, government departments at all levels, non bank financial institutions and other units and individuals, except for those decided by the State Council that the peoples Bank of China may provide loans to specific non bank financial institutions. The peoples Bank of China shall not provide guarantee to any unit or individual. Source: surging news editor: Wang Xiaowu_ NF
In this regard, when improving the governance system of the peoples Bank of China, the draft for comments clearly states that the peoples Bank of China will continue to adhere to the principle that the peoples Bank of China does not directly subscribe for or underwrite treasury bonds and other government bonds, and does not provide loans to local governments.
The peoples Bank of China shall not provide guarantee to any unit or individual.