Article/Wang Yongli, columnist of Sina Financial Opinion Leader Column (WeChat official account kopleader)
Facing the difficulties and pain points of China's finance, we should not only look at the problem from the perspective of financial institutions, but also face the difficulties and pain points of China's finance from the perspective of the development of the whole country; It is not only from the perspective of financial institutions, but also from the perspective of the whole national development stage, the overall financial situation and the whole process of monetary and financial activities.
If we look back on the development of the financial industry, it is not difficult to find that China's finance can be said to have weak foundation, fast speed, great achievements and many problems. Now it is urgent to reorganize and make profound changes.
Before the reform and opening up, the planned economy severely shrank the financial function. All finance was basically centralized in the People's Bank of China, with outstanding administrative management. The main functions were "printing money" and "cashier".
On this basis, reform and opening up have promoted the rapid development of monetary finance. However, due to the weak foundation and rapid development, the whole society's lack of accurate understanding and overall grasp of monetary finance, and insufficient overall planning and reasonable division of finance, the responsibility orientation and division of labor and cooperation of financial supervision are unreasonable, and there are many problems in the construction of financial system structure (equity structure, direct and indirect financing structure, financial market structure, etc.) and financial laws and regulations, Many problems have been accumulated with the rapid expansion of finance, and have not been sufficiently exposed and digested. After the economic development has entered the shift transformation and continued to decline, risks have been exposed sharply. Preventing and resolving major financial risks has become the first of the three major national battles, which need high attention and effective response.
Facing the difficulties and pain points of China's finance, we should not only look at the problem from the perspective of financial institutions, but also face the difficulties and pain points of China's finance from the perspective of the development of the whole country; It is not only from the perspective of financial institutions, but also from the perspective of the whole national development stage, the overall financial situation and the whole process of monetary and financial activities; Covering macro policy, meso regulation, micro market construction, etc., analyze and sort out one by one, and at least six dimensions of problems need attention:
Pain point 1: core objectives of monetary policy and central bank's responsibility positioning
This is a fundamental and long-standing problem.
According to the Law of the People's Republic of China on the People's Bank of China (the Central Bank Law), "the goal of monetary policy is to maintain the stability of the value of the currency and thereby promote economic growth." But in practice, China's monetary policy goals and the positioning of the central bank's responsibilities are the most complex in the world, including promoting economic growth, stabilizing prices (currency value) Full employment and balance of payments, as well as maintaining financial stability and supporting structural reform, but too many goals and responsibilities will lead to contradictions and even conflicts. If there is no distinction between primary and secondary, it will lead to vague policy orientation, low decision-making efficiency, chaotic policy signals, and affect the accuracy and effectiveness of monetary policy. Money is the foundation and soul of finance, and the deviation of monetary policy will become an important source of financial risks, which must be clearly understood.
From international experience, the core goal of monetary policy can only be to stabilize prices (currency value), which is also the core responsibility of the central bank. Therefore, it is necessary to create conditions to ensure the independence of the central bank and the effective play of its core responsibilities.
This further leads to a question: how to divide and coordinate monetary policy (central bank) and fiscal policy (finance)?
Related issues include three aspects:
First, how to coordinate and cooperate in the management of national foreign exchange reserves?
For a long time, China has called the reserve formed by the central bank's purchase of foreign exchange with RMB as "national foreign exchange reserve". In the case of a large inflow of international capital and an expanding trade surplus, the central bank acts to curb the rapid appreciation of the RMB exchange rate and has to purchase a large amount of foreign exchange and expand reserves, but this has led to a large amount of investment of RMB base currency, It is difficult to control the total amount of money and the price level. In this process, governments at all levels are still implementing preferential policies to attract investment and encourage exports, which makes it difficult to coordinate and closely coordinate fiscal policies and monetary policies. The central bank has to take measures to hedge while expanding foreign exchange reserves and base currency, and increase hedging costs on a large scale.
In fact, it is entirely possible to consider that when the central bank's foreign exchange reserves and base currency expand too fast and have to implement hedging, the financial department will issue special treasury bonds to financial institutions to purchase a certain proportion of foreign exchange from banks, share the pressure of the central bank and the cost of hedging, and promote them to adjust the policy conditions for attracting investment and encouraging exports by feeling the cost pressure. As for whether the foreign exchange purchased by the government should be operated independently as a sovereign fund or entrusted to the central bank for unified arrangement, it can be flexibly controlled according to the actual situation.
In addition, for a long time, China's national foreign exchange reserves have been exclusively operated and managed by the People's Bank of China and the Foreign Exchange Administration. It is worth studying whether the basic principles, risk limits, actual results (including balance, currency and asset allocation, profit and loss results, etc.), performance assessment, etc. of their operation and management should be submitted to the National People's Congress for deliberation by the State Council (with the participation of relevant departments).
Second, can the central bank directly purchase government bonds?
The Law of the Central Bank stipulates that the People's Bank of China shall not overdraft the government finance, directly subscribe for and underwrite national bonds and other government bonds, and can only buy and sell national bonds, other government bonds and financial bonds in the open market. Such regulations are mainly aimed at preventing the government from intervening in the central bank's money supply through overdraft and enhancing the marketization and standardization of government financing. However, with the passive reduction of the central bank's foreign exchange (base currency), in order to maintain a reasonable and sufficient money supply, the central bank needs to increase the money supply in other ways. Among them, the purchase and maintenance of government bonds of a certain scale is an important means for central banks to regulate the total amount of money. China can also consider allowing central banks to make independent decisions (rather than government intervention) to directly purchase government bonds.
Third, should the central bank implement a large number of differentiated monetary policies?
In recent years, the People's Bank of China has implemented more and more differential directional reserve ratio reduction and other targeted monetary policies, making the legal deposit reserve ratio implemented by financial institutions vary greatly; While maintaining a huge amount of legal deposit reserve (nearly 20 trillion yuan at the peak), the Central Bank also lent a huge amount of funds to financial institutions (now basically more than 10 trillion yuan), greatly expanding the scale of the central bank's balance sheet. Moreover, due to the large interest margin between the two, the operating costs of commercial banks have increased; While maintaining a high statutory deposit reserve ratio, it also introduced a deposit insurance system.
Whether these practices are reasonable, whether they will affect the fair competition of financial institutions from the source of policy, whether they raise the financing cost from the source of capital supply, and whether monetary policy has replaced fiscal policy, etc. deserve serious reflection.
Pain point 2: Functional orientation and institutional improvement of capital market
Why expect the prosperity of the stock market if the long-term structural problems are not solved well?
At the initial stage, the capital market is mainly to solve the financing problem of state-owned enterprises, rather than really solving corporate governance and improving transparency. The approval system has been adopted for the listing of enterprises for a long time, with strong administrative color; There is basically no exit mechanism for listed companies. The stock market is short of long-term funds, and the speculative nature is very prominent. The price earnings ratio of small-scale tradable shares is often absurdly high, which is easy to rise and fall; Market supervision and punishment for violations are not independent and strict enough, and insider trading and price manipulation are common; Lack of stock repurchase and cancellation mechanism, and the phenomenon of random suspension and long-term suspension is quite common; The proportion of stock pledge is very high, and major shareholders often transfer risks through stock pledge; The setting of the stock market price index is not reasonable enough, and the index change is difficult to become a "barometer" of economic development.
Because the system is not perfect, the supervision cannot keep up with the pace, and the opening of the capital market is also restricted, it is difficult for the entire capital market to become an international capital market like London and New York, or even like Hong Kong and Singapore, and to form its own international influence.
If this situation does not change, it will seriously hamper the construction of China's international financial center and the process of RMB internationalization (the most important application basis of a country's currency internationalization is the pricing and clearing of international financial transactions), and it will also be difficult to effectively enhance China's comprehensive financial strength and international influence.
Pain point 3: reasonable division and coordination of financial supervision
The division and coordination of the financial field are not well solved, and many problems are difficult to eliminate from the root.
China's finance is transformed from the planned economy, mainly from the People's Bank of China, and some are created and managed by other national ministries and commissions or local governments. On the basis of this, it lacks necessary overall planning and reasonable division, lacks quasi recognition and full grasp of monetary finance, and the approval and supervision of financial businesses and institutions involve many departments, The division of responsibilities of relevant departments is unscientific and unclear, and duplication and omission coexist. Similar businesses often have different regulatory departments, different rules, backward laws and regulations, uncoordinated supervision, and even competing for power and profit. When problems arise, they try to buck each other. There are many regulatory loopholes, and there is a large arbitrage gap. With the rapid development of finance, the inherent deficiencies in the infrastructure and management framework have accumulated and bred new problems, which are now very serious.
The relevant issues involved here include four points:
A. Management of investors in financial institutions
In China, financial institutions include a variety of ownership structures, such as state-owned sole proprietorship, state-owned holding, non-state-owned holding (private finance), and foreign holding. Among them, state-owned or state-owned holding also includes the central government and local governments, as well as the investment of the People's Bank of China (including investment with foreign exchange reserves), financial investment at all levels and the investment of the State owned Assets Supervision and Administration Commission (state-owned enterprises investing in financial institutions), as well as mutual cross investment. At the same time, the boundaries of responsibilities of the central bank, policy banks, commercial banks, etc. still need to be clarified.
The structure of financial institutions' investors is very complex, especially when governments at all levels become investors, and the main managers of financial institutions and financial regulators are appointed by the government, which adds great difficulty to the management of financial institutions.
On July 8, 2018, the Guiding Opinions of the Central Committee of the Communist Party of China and the State Council on Improving the Management of State owned Financial Capital clarified that the Ministry of Finance and local financial departments are authorized by the State Council to perform the responsibilities of state-owned financial capital contributors, and the question of who (PBOC or Finance or SASAC, etc.) should perform the regulatory responsibilities of state-owned financial capital contributors for more than ten years has been disputed. The financial department is mainly responsible for the state-owned financial capital (including the People's Bank of China, whose total capital is invested by the state and owned by the state), exercising the investor's authority and assuming the responsibility of maintaining and increasing the value of the capital. The financial supervision department no longer performs the responsibility of managing the investors of financial institutions (the financial supervision department bears an important market supervision function. If it performs the responsibility of managing the investors of some financial institutions at the same time, it will affect the authority, fairness and effectiveness of financial supervision, which is likely to lead to moral hazard. To avoid conflicts of interest), It is mainly responsible for the external supervision of various types of ownership financial institutions, and achieves the requirements of compliance and prudential supervision through "risk management, legal person management, and access management". Relevant ministries and commissions of the central and state organs, financial departments at all levels and local governments shall not interfere in the supervision of financial supervision departments.
Nevertheless, in the actual implementation process, the management responsibilities of the Central Bank, financial supervision, financial departments and Party organizations still need to be coordinated, adapted and clarified,
B. Division of regulatory responsibilities of financial institutions
The supervision of Chinese financial institutions was initially undertaken by the People's Bank of China alone, and then successively set up the Securities Regulatory Commission, the Insurance Regulatory Commission and the Banking Regulatory Commission, forming a situation of "one bank and three committees" at the State Council level (the combination of the Banking and Insurance Regulatory Commission in 2018). However, in the process of separation, due to the lack of sufficient cognition and demonstration, the result is that institutional supervision is the main form, "who approves, who supervises", and there is also a lack of reasonable division between financial professional supervision and financial institution investor management. Since then, other departments and local governments have also participated in the approval and supervision, making financial supervision more complex.
Among them, in 1998, in response to the serious problems exposed by the previous mixed operation of financial institutions, the state promoted a round of profound financial reform. In addition to promoting the separation of the central bank, policy banks and commercial banks, and weakening the administrative intervention of local governments, it focused on promoting the separate operation and supervision of financial institutions.
"Separate operation and separate supervision" originally refers to the reasonable division of financial professional fields, and then the implementation of specialized and integrated professional supervision in accordance with various fields. This is a very scientific regulatory concept. However, in practical work, due to the lack of overall planning and scientific division, the result gradually evolved into "branch approval, branch supervision, who approves who supervises" ("who takes the child"), and there are more and more serious regulatory overlaps and regulatory omissions.
For example, the responsibilities of the China Securities Regulatory Commission (CSRC) are to uniformly supervise and manage the national securities and futures market, maintain the order of the securities and futures market and ensure its legal operation in accordance with laws, regulations and the authorization of the State Council. But the reality is that the CSRC is only responsible for stocks, corporate bonds, commodity futures, stock index futures National debt index The supervision of futures and bonds, the most important component of securities, have long been "Jiulong Water Control" in China. The main departments responsible for approval and management include: government bonds such as treasury bonds - financial departments; Bonds of financial institutions - the People's Bank of China and financial regulatory authorities; Listed company bonds (corporate bonds) - CSRC; Non listed corporate bonds - NDRC; Medium term notes, etc. - People's Bank of China; Foreign capital issues RMB bonds in China ("Panda Bonds") - Ministry of Commerce; The issuance of bonds overseas by domestic institutions needs to be approved by more departments. Eighty nine percent of all bond transactions are conducted in the inter-bank market, not in the stock exchange. It is mainly managed by the People's Bank of China, not by the CSRC. In the field of futures business, the CSRC is only responsible for the management of commodity futures, stock index and treasury bond futures, while gold futures and foreign exchange futures are mostly managed by the People's Bank of China (the "Gold Exchange" and "Foreign Exchange Trading Center" are directly under the People's Bank of China), and are mainly conducted in the inter-bank market. In addition, the Insurance Regulatory Commission also led the establishment and operation of the "Insurance Products Exchange" ("Insurance Exchange").
Therefore, the Securities Law of the People's Republic of China (the Securities Law) stipulates that this Law applies to the issuance and trading of stocks, corporate bonds and other securities recognized by the State Council according to law within the territory of the People's Republic of China; The securities regulatory authority under the State Council implements centralized and unified supervision and administration of the national securities market according to law. As a result, the Securities Law is actually mainly the Securities Regulatory Commission Law, which needs to be revised and improved urgently.
Similarly, China's Trust Law is actually mainly the Trust Company Law.
It can be seen that how to reasonably divide the financial professional fields, how to scientifically divide the corresponding financial supervision departments' supervision fields, how to realize the "specialized, integrated and penetrating supervision" in different fields, and how to avoid major regulatory overlaps and omissions need to be comprehensively considered and carefully planned. If this basic problem is not solved, many problems will be difficult to eliminate fundamentally.
C. How to treat and break the "rigid cashing"
For a long time, many people have been calling for breaking the "rigid cashing", but what is "rigid cashing" and how to break the rigid cashing are very ambiguous. "Rigid cashing" is actually an obligation of financial institutions. As a financial institution, it must be trustworthy and honest. The promised payment items or responsibilities must be carefully performed, and it is not allowed to evade debts at will. Breaking the rigid cashing does not encourage financial institutions to refuse to fulfill their commitments at will. To "break the rigid cashing", the first thing is to break the promise that all financial institutions can guarantee the principal and pay interest when raising funds. This requires that financial institutions should first strictly distinguish between "depository institutions" and "non depository institutions", and accordingly make it clear that only depository institutions can absorb deposits from the society and promise to guarantee the principal and pay interest on deposits. Non depository institutions are not allowed to absorb deposits from the society, and their social funds raised in accordance with the law for financial business are not allowed to promise to guarantee the principal and pay interest. Within the scope of investor authorization, the profits and losses of fund operation are all borne by the investor, and financial institutions can only collect management fees as agreed by the manager.
For depository institutions, in order to ensure their rigid cashing, the regulatory authorities should strictly supervise their capital adequacy ratio, liquidity ratio, provision coverage and other related indicators, and establish a deposit margin system or deposit insurance system. At the same time, it is necessary to restrict the use of high-risk funds, including strictly controlling its direct investment and mergers and acquisitions, and preventing unfair competition in the market due to its capital strength formed by absorbing social deposits.
In China, there has been a lack of strict division between depository institutions and non depository institutions, and even a lack of basic knowledge in this regard. As a result, emerging payment institutions can take margin deposits from the beginning, but they are not regulated as depository institutions; Not only do banks that absorb social deposits have a commitment to guarantee the principal and pay interest on deposits, but many other financial businesses have a substantial commitment to guarantee the principal and pay interest on raised funds, which seriously blurs the boundary between depository institutions and non depository institutions, but they do not manage according to depository institutions in a unified way, resulting in homogeneous financial operations and vicious competition, So that later all types of financial institutions were carrying out "asset management business", which caused very serious risk problems. Even though the relevant departments have spent a lot of effort to issue a unified "new asset management regulations", it is still to allow all types of financial institutions to carry out asset management business, and it is still to allow each regulatory authority to issue implementation rules and supervise different institutions separately. It is reasonable and worth serious reflection. Another meaning of "breaking the rigid cashing" is to break the rigid cashing of financial institutions supported by the government or the central bank. For a long time, maintaining financial stability has become an important goal of the government and the central bank. When financial institutions fail to honor their obligations, the government and the central bank often help to solve the problem, instead of allowing them to go bankrupt and liquidate. As a result, after the bankruptcy and liquidation of "Hainan Development Bank" in 1998, no bank has gone bankrupt, and other types of financial institutions are basically the same. In this way, commercial financial institutions become invisible central banks, and the government provides invisible unlimited guarantees for their debts, which seriously weakens the risk awareness of the whole society and distorts the basic mechanism of social capital allocation.
Therefore, how to treat and break the rigid cashing needs to be carefully considered and accurately grasped.
D. Reasonably grasp the responsibility orientation of the supervision department
At present, there are many contents and responsibilities of financial supervision in China, and the regulatory rules and regulations are very comprehensive and detailed. They have always pursued full coverage and zero risk. Even foreign language examinations are organized for expatriate cadres of financial institutions. Accordingly, the regulatory agency has a large number of personnel and high costs, but it is often not prominent in the regulatory focus, the risk bottom line is not clear, the professional level is not in place, the punishment for violations is not strict, the bargaining space is large, regulatory overlap and omission coexist, power rent-seeking is difficult to eliminate, and the problems are often powerless.
This involves an important issue: the financial supervision department's responsibility orientation, whether to focus on both development and supervision, or mainly responsible for supervision? Is it the bottom line supervision of risk and compliance or the comprehensive supervision of financial business (how to reasonably divide the operation and management responsibilities with financial institutions)? How can supervision clarify responsibilities, improve efficiency, reduce costs, and strengthen supervision accountability?
At the same time, the "Financial Stability and Development Commission of the State Council", established at the end of 2017, is the deliberation and coordination body of the State Council to coordinate major issues of financial stability, reform and development, although its main responsibilities have been defined as: implementing the decisions and arrangements of the Party Central Committee and the State Council on financial work; Deliberate major plans for the reform and development of the financial industry; Overall planning of financial reform, development and supervision, coordination of monetary policy and financial supervision related issues, overall planning and coordination of major financial supervision issues, coordination of financial policy and related fiscal policies, industrial policies, etc; Analyze, study and judge the international and domestic financial situation, respond well to international financial risks, study systematic financial risk prevention and disposal and major policies to maintain financial stability; To guide the development and supervision of local financial reform, supervise the business of financial management departments and local governments, and hold them accountable for their performance of duties, but how to accurately grasp the responsibilities and power positioning in their actual operation remains to be refined and clarified, especially how to define the relationship with the Central Finance and Economics Commission, the Central Bank, the Ministry of Finance (representatives of investors of state-owned financial institutions) Relationship between financial supervision and relevant national departments; How to strengthen the overall planning and promotion facilities of the national financial development strategy; How to strengthen overall coordination and effectively handle the relationship between the central and local governments, finance and finance; How to establish and improve the emergency handling mechanism and accountability mechanism for major financial risks.
Pain point 4: profound changes in the structure of money and capital supply and inadequate response
This problem may be the source of the rapid development of social funds and shadow banks.
Since 2000, a very important channel for China's money supply has been the central bank's purchase of foreign exchange and direct RMB supply to enterprises, institutions and individual residents who sell foreign exchange (the intermediary will handle the settlement and sale of foreign exchange and resale of foreign exchange through commercial banks), which is reflected in the central bank's foreign exchange reserves. Among them, by the first half of 2014, the central bank's foreign exchange holdings had been growing, but since the second half of 2014, there has been a significant decline, and the entire money supply structure has undergone profound changes.
Since 2000, the changes of the central bank's foreign exchange reserves and the total amount of money M2 are as follows:
From the change of M2 of the total amount of money and the ratio of the central bank to foreign exchange, it was 9.09 in 2000, and then decreased year by year, the lowest was 3.18 in 2008. It began to recover year by year in 2009, increased at a faster pace after 2015, and reached 7.81 at the end of 2017. Considering that the central bank's foreign exchange account has been shrinking or stabilizing since the second half of 2014, the money supply mainly relies on bank loans and other channels and methods, and this trend is still continuing: the ratio of the two increased to 8.23 in June 2018, and it is expected that by the end of the year, the level of 8.42 in 2001 will be completely exceeded.
This change in the structure of money supply has the greatest impact on the distribution of social financing costs and profits in the financial system and the real economy:
The central bank will purchase foreign exchange to release base currency and directly inject it into the bank deposit account of enterprise units or individual residents selling foreign exchange. From the perspective of obtaining RMB by enterprise units or individual residents, the cost is almost zero except for a part of currency exchange fees, which is very low. These funds belong to the income or self owned funds of foreign exchange sellers, rather than liabilities, and their asset liability ratio will decrease accordingly. At the end of 2014, the central bank's foreign exchange account increased by 25.59 trillion yuan compared with the end of 2000, effectively expanding the investment of interest free funds in the whole society and reducing the financing costs of the whole society.
However, if enterprises or individual residents want to obtain derivative currency, their liabilities will be increased accordingly, and they need to pay interest on loans or bonds and related expenses. The financing cost will be greatly increased, and their asset liability ratio will also increase accordingly. The total amount of money in China has increased from 122.84 trillion yuan at the end of 2014 to 167.68 trillion yuan at the end of 2017, an increase of 44.84 trillion yuan. In the same period, the amount of foreign exchange held by the central bank has decreased by 5.59 trillion yuan. The combination of the two means that the amount of money increased by 50.43 trillion yuan in three years relying on indirect financing. The scale of debt of the whole society has expanded and the debt ratio has increased accordingly.
Since the second half of 2014, the amount of foreign exchange held by the central bank has declined. In particular, the sharp contraction in 2015 and 2016 has had a profound impact on the entire social financing structure, financing costs, and social profits are increasingly transferred from the real economy to the financial system (virtual economy), Promote the increasing proportion of financial added value in GDP (the proportion of added value in China's financial industry in GDP has gradually decreased from nearly 5% in 2000 to 4% in 2005, starting in 2006
At the beginning, state-owned banks and other financial institutions went public through share reform, supplemented capital on a large scale, enhanced business development strength, and expanded the opening up of the financial sector. The financial industry significantly accelerated its development, and its added value accounted for a larger proportion of GDP rebounded, reaching about 5.5% in 2007, and then kept steady growth. In 2014, it accelerated to 8.4% in 2015, which exceeded the 7.2%, 4.4% and 7.2% of those of the United States, Japan and the United Kingdom). This has also become an important reason for the rapid development of shadow banking since the second half of 2014, when more and more enterprises feel that the financing cost is getting higher and higher, the operating pressure is getting greater and greater, and the social capital is becoming more and more "unrealistic".
Pain point 5: ownership structure and internal governance mechanism of financial institutions
This issue concerns the vitality and controllability of the financial system, and fair competition.
So far, the majority of financial institutions in China are state-owned and state-owned holding companies. So, whether this structure is reasonable, how to optimize the strategic allocation and layout of state-owned financial capital, whether to reduce the proportion of state-owned holding companies in individual financial institutions and the whole financial system, and enhance the vitality and fair competition of the whole financial system, To maintain the state's control over the financial system?
In state-owned and state-controlled financial institutions, a governance structure consisting of "three meetings and one layer" (the board of shareholders, the board of directors, the board of supervisors and the senior management) and the Party organizations has basically been formed. The general secretary of the party committee (group) is concurrently held by the chairman of the board of directors, and some have a special secretary of the party committee. The main issues involved include two points:
A. Establishment of the Board of Supervisors. Strictly speaking, the responsibilities of the board of supervisors are mainly to supervise whether the board of directors and senior management are conscientiously performing their duties. However, in state-owned and state-controlled financial institutions, this kind of peer supervision is actually very weak, difficult to play its due role, and prone to conflicts. Moreover, although the level of the chairman of the board of supervisors is the same as that of the chairman and president (president), the actual responsibilities and pressures undertaken by the chairman of the board of supervisors vary greatly. Therefore, we can consider canceling the establishment of the internal board of supervisors and changing it to an external board of supervisors or "expatriate internal board of supervisors". The chairman of the board of supervisors can also serve as the secretary of the Party's discipline inspection commission, so as to better play its role in supervising the board of directors and senior management.
B. Organizational structure. We can learn from the reform plan of the central state organs, and the party organizations of financial institutions can integrate with the operation and management system as much as possible. For example, the secretary and deputy secretary of the party committee, that is, the chairman and president (president), the supervisor and the secretary of the discipline inspection commission, the party organization department and the human resources department, the discipline inspection and supervision department and the audit/audit department The Party Affairs Department is merged with the Board of Directors or the President's Office.
In private financial institutions, the most prominent problem now is the excessive control and out of control of major shareholders (management control). It is difficult to effectively control related transactions, effectively implement internal control rules, and often overhead external supervision.
Pain point 6: implementation of financial strategic planning and prevention and resolution of major financial risks
The 19th National Congress of the Communist Party of China clearly proposed that by the middle of this century, China should become a country with leading comprehensive national strength and international influence. At the same time, it is also clear that the core competitiveness of financial countries is important, and financial security is an important part of national security. So, what should finance do around the national strategic objectives?
It must be noted that since the reform and opening up, China's finance has made great progress, but compared with the world's leading financial institutions, there is still a considerable gap in the vitality of finance, the level of inclusiveness, the degree of opening up and market-oriented competition, especially the international influence, and the requirements of the overall national strategic objectives, It is urgent to accelerate the formation and effective implementation of the national financial strategic plan centering on the overall strategic goal of the country.
The prominent problems are as follows:
First, how to accurately understand and grasp the positioning of finance in the entire national economy, "finance is the core of modern economy" and "finance must return to its original source, adhere to the purpose of serving the real economy, and enhance its ability to serve the real economy"? How do you think the proportion of financial added value in GDP has exceeded that of the United States, Japan and even the United Kingdom?
Second, while emphasizing the return of finance to its original source, insisting on serving the real economy, and curbing economic development from being unrealistic to false, how to treat the combination of industry and finance? More and more enterprise groups invest in the financial field, especially state-owned enterprises invest heavily in real estate and finance. Many enterprises' profits mainly come from real estate or finance rather than from their main business, Is this inconsistent with the requirement of restraining the economy from being unrealistic to being empty, and does it affect the fairness of social capital allocation?
Third, what are the main aspects of financial comprehensive strength and international influence, and what measures should be taken to promote its effective enhancement? How to promote the construction of an international financial center and the internationalization of RMB? How to treat real estate finance and how to prevent American style subprime loan risk? How to comprehensively deepen financial reform and opening up?
At the same time, we must be soberly aware that because many basic issues are not clarified, monetary and financial theory research is seriously divorced from reality, and risks are constantly generated and accumulated in the process of rapid financial development. With the shift and transformation of economic growth entering a critical period, we are facing a special stage of concentrated international and domestic conflicts, Now, preventing and resolving major financial risks has become the first of the three major national battles. However, so far, China has not experienced the test of a truly localized financial crisis, and the whole society is seriously lacking in financial knowledge and risk awareness. From financial institutions to regulatory authorities, and even national coordination agencies, all levels lack the necessary prediction ability and response experience for financial risks.
It is urgent to reorganize and make profound changes
Obviously, the contradictions and risks in China's financial development have become very prominent today. If we only solve the problems on the basis of problems, we can only solve the symptoms rather than the root causes. It is difficult to cope with the profound changes in the situation and the requirements of the national development strategy.
After 40 years of reform and opening up in China and the tenth anniversary of the global financial crisis, the development of socialism with Chinese characteristics has entered a new era. In the face of more complex international and domestic economic and financial situations, it is urgent to introduce more profound and extensive reform and opening up. Among them, it is more necessary to comprehensively and profoundly reflect on and summarize the experience and lessons of China's financial development and the global financial crisis since the reform and opening up, re plan and layout the financial system, actively promote comprehensive and profound reform and opening up in the financial field, prevent and resolve major financial risks that may break out, and be ready to deal with new serious crises.
China is currently facing enormous challenges, but it still has significant opportunities and comparative advantages: China is the largest developing country and is still in the process of industrialization, urbanization and informatization. There is still great room or potential for reform. The profound changes in the international and domestic environment have also brought important pressure and impetus for deepening reform and opening up. At the same time, China has 3 trillion US dollars of foreign exchange reserves, the country's foreign debt burden is relatively light, and it has the strength to withstand external shocks; The debt ratio of the central government is very low, and there is still much room to implement proactive fiscal policies; The overall interest rate level is still relatively high (the yield of ten-year treasury bonds is still around 3.5%), and there is a lot of room for adjustment in the central bank's asset liability optimization and the structural reform of the capital supply side (such as reducing the statutory deposit reserve and matching the central bank's lending funds); The strength of financial institutions to resist risks has also been greatly enhanced; The country is actively promoting the new globalization development of the "Belt and Road", and promoting international "equality and mutual benefit, joint discussion and sharing, and building a community with a shared future for mankind". It is believed that China can effectively prevent and resolve financial risks and achieve better financial, economic and social development in accordance with the general tone of "seeking progress while maintaining stability".
The 40 years of reform and opening up and the 10th anniversary of the financial crisis are the best time to seriously reflect, deepen reform, and explore and innovate
(About the author: former Vice President of Bank of China)
