To this end, the financial commission has put forward five major requirements: first, improve the political position and earnestly fulfill its responsibilities; second, uphold the zero tolerance attitude to maintain market fairness and order; third, strengthen industry self-discipline and supervision, and strengthen market restraint mechanism; fourth, strengthen coordination and cooperation among departments; fifth, continue to deepen reform.
Wang Yifeng, chief analyst of Everbright Securities and financial industry, believes that the root cause of the financial market risk caused by the AAA grade state-owned enterprise bonds is related to the long-term problems existing in the operation of bond issuers, the unreasonably high credit rating and the failure of static adjustment, resulting in the failure of market selection mechanism. For the disposal of problem institutions, we should adhere to the principle of online repair as far as possible, and conduct less bankruptcy liquidation. But we cant simply rely on financial restructuring. We should combine debt restructuring with enterprise restructuring to change the vitality of enterprise production and operation.
State owned enterprises and private enterprises are treated equally
Recently, brilliance Automobile Group Holding Co., Ltd., whose main credit rating is AAA, and Henan Yongcheng Coal and Power Holding Group Co., Ltd. (hereinafter referred to as Yongmei) have successively issued bond default announcements, and the market is shocked by the beyond expectation default. AAA is the highest level of bond credit rating, which means that the ability to repay debt is very strong and the risk of default is extremely low.
In the next few days, the default of local state-owned corporate bonds quickly set off a shock wave in the credit bond market, forming a chain reaction. Many public funds and securities companies stepped on the asset management thunder, the credit spreads of all maturities and grades increased rapidly, and the cancellation of issuance in the primary market of credit bonds increased.
The market is generally worried about the impact of credit default risk on the market and macro-economy? Will the default of state-owned enterprises occur frequently in the future?
Wang Qing, chief Macro Analyst of Dongfang Jincheng, believes that in the short term, this round of default has a great impact on the credit bond market, and it is transmitted to interest rate bonds, convertible bonds, stocks and other assets through liquidity and risk sentiment, but it is not expected to affect the medium and long-term stability of the bond market. Considering that the default subject of this round is mainly industrial local state-owned enterprises with weak credit status, and the risk outbreak is still in a dot shape, the panic in the subsequent bond market is expected to gradually ease. It is expected that the issuance of state-owned enterprise bonds will face pricing restructuring, and the state-owned enterprises with weak qualifications in sensitive regions or industries will face increasing financing difficulties, which will lead to the possibility of rising default risk.
In recent years, the reform and opening-up of Chinas bond market has been deepening, and the function of serving the real economy has been continuously enhanced. However, with the slowdown of domestic macroeconomic growth and the rise of corporate credit risk, the bond market has entered a period of multiple defaults. In particular, in 2018, the serial default of credit bonds of private enterprises has become a prominent issue in the bond market.
The meeting of the financial committee calls for improving the political position and earnestly fulfilling the responsibilities. Financial supervision departments and local governments should proceed from the overall situation and in accordance with the requirements of comprehensively ruling the country in accordance with the law, resolutely safeguard the authority of the legal system, implement the regulatory responsibility and territorial responsibility, supervise and urge all kinds of market entities to strictly perform their main responsibilities, and establish a good local financial ecology and credit environment.
This time, the language of the financial committee is still relatively heavy. We should improve our political position and earnestly fulfill our responsibilities. In fact, the default of state-owned enterprise bonds will bring a series of chain reactions and destroy the local financial ecology and credit environment. For example, it will make it more difficult for local governments or urban investment platforms to issue bonds, and the local investment rate will decline. This will also have a certain impact, or even impact, on maintaining growth and promoting transformation of the entire Chinese economy. Chen Wen, director of the digital economy research center of the school of Finance and economics of Southwest University of Finance and economics, told reporters at the first finance and economics department that it is necessary to establish the credit of both private and private enterprises. The meeting of the financial commission shows that the state-owned enterprises and private enterprises are treated equally.
Put an end to the evasion and cancellation of debts of state owned enterprises
In this regard, some experts have written articles saying that it is expected that there will be higher-level supervision to coordinate local governments, strengthen the concept of the market stresses credit, and debt must be paid back. The finance and finance will work together to solve the problem of credit default of state-owned enterprises, put an end to the phenomenon of evasion and cancellation of debts by state-owned enterprises, and repay the credit market with confidence to prevent credit risk from becoming regional or even systemic financial style A dangerous situation.
The meeting of the Financial Committee stressed that we should uphold the zero tolerance attitude and maintain the fairness and order of the market. We should strictly investigate and deal with all kinds of illegal acts such as fraudulent issuance, false information disclosure, malicious transfer of assets and misappropriation of issuance funds in accordance with the law, severely punish all kinds of evasion and cancellation of debts and protect the legitimate rights and interests of investors.
In fact, the regulatory authorities have always held a zero tolerance attitude towards evasion and cancellation of debts. For this round of debt default, the regulatory authorities have also been involved in the investigation.
Recently, in response to the default of corporate bonds, the national development and Reform Commission (NDRC) said that in view of some potential risks in corporate bonds, the NDRC will pay close attention to the interest payment and cashing of relevant bonds, and urge the formulation of solutions to protect the legitimate rights and interests of investors.
On November 12, the association of dealers announced that it had launched a self-discipline investigation on Yongcheng Coal and power and other relevant institutions; on the 19th, the self-discipline investigation was extended to the main underwriters such as industrial bank, Everbright Bank and Zhongyuan bank, as well as China integrity international credit rating Co., Ltd. and xigma certified Public Accountants (special general partnership). On the 20th, the CSRC announced that it had legally conducted a self regulatory investigation on brilliance automobile group We will carry out special inspection, take administrative supervision measures to issue warning letters to brilliance group, and decide to file and investigate suspected information disclosure violations, conduct synchronous verification on intermediary agencies involved in relevant bonds of brilliance group, and seriously investigate and punish relevant illegal behaviors.
The financial commission said that bond issuing enterprises and their shareholders, financial institutions, intermediary institutions and other market entities must strictly abide by laws and regulations and market rules, adhere to professional ethics, be diligent and responsible, be honest and trustworthy, and effectively prevent moral hazard. At the same time, we should improve the mechanism of risk prevention, detection, early warning and disposal, strengthen the investigation of potential risks, maintain reasonable and sufficient liquidity, and firmly hold the bottom line of no systemic risk.
Wang Yifeng said that the financial market risk caused by this round of AAA grade state-owned enterprise bonds is related to the long-term problems existing in the operation of the bond issuers, the false high credit rating and the failure of static adjustment, resulting in the failure of market selection mechanism.
On the one hand, there are some problems in some enterprises, such as management confusion, blind involvement in capital market merger and acquisition expansion, unclear property rights, etc., and the core business segment has been operating poorly for a long time. While some local state-owned enterprises, in the process of the transformation of the old and new economic momentum, have prominent cyclical and structural problems, long-term high leverage operation, operating cash flow is obviously insufficient, and gradually slide to speculative financing or Ponzi financing stage; on the other hand, domestic rating agencies are forced by performance pressure to excessively cater to customer rating requirements, and the rating model of enterprises And financial analysis methods, there are some systematic deviations, leading to some AAA rated enterprises, their credit rating and actual operating capacity there is a big mismatch. Wang Yifeng believes that two principles should be followed in dealing with default risk: one is to follow the principles of marketization and legalization to avoid excessive market intervention, but also to prevent secondary risks; the other is to adhere to the online repair mode, combining debt restructuring with enterprise restructuring. For the disposal of problem institutions, we should adhere to the principle of online repair as far as possible, and conduct less bankruptcy liquidation. But we cant simply rely on financial restructuring. We should combine debt restructuring with enterprise restructuring to change the vitality of enterprise production and operation. The financial commission also stressed the need to deepen the reform of the bond market, establish and improve the market system, improve the market structure and enrich product services. We should deepen the reform of state-owned enterprises and improve the quality and efficiency of operation. Source: Wang Wenhua, editor in charge of the first finance and Economics_ NF5982
Wang Yifeng believes that two principles should be followed in dealing with default risk: one is to follow the principles of marketization and legalization to avoid excessive market intervention, but also to prevent secondary risks; the other is to adhere to the online repair mode, combining debt restructuring with enterprise restructuring. For the disposal of problem institutions, we should adhere to the principle of online repair as far as possible, and conduct less bankruptcy liquidation. But we cant simply rely on financial restructuring. We should combine debt restructuring with enterprise restructuring to change the vitality of enterprise production and operation.