Chinanews.com, October 23. The People's Bank of China issued a notice on the "People's Bank of China Law of the People's Republic of China (Revised Draft for Solicitation of Comments)" on the 23rd.
The "Draft for Comment" intends to clarify, strengthen macro-prudential management and systemic financial risk prevention, coordinate the supervision of systemically important financial institutions, financial holding companies and important financial infrastructure, coordinate the overall statistics of the financial industry, and increase the punishment for financial violations .
The full text of the explanation on the "People's Bank of China Law of the People's Republic of China (Revised Draft for Solicitation of Comments)" is as follows:
The "People's Bank of China Law of the People's Republic of China" (hereinafter referred to as the "People's Bank of China Law") has been included in the legislative plan of the 13th National People's Congress Standing Committee and the 2020 legislative plan.
In order to thoroughly implement the financial reform arrangements of the Party Central Committee and the State Council, and build a modern central bank system, the People's Bank of China organized the drafting of the People's Bank of China Law (Revision Draft for Solicitation of Comments) (hereinafter referred to as the "Draft for Solicitation of Comments").
1. The necessity of amendments to the People’s Bank of China Law
(1) The need to implement the central financial reform and deployment and build a modern central bank system.
The 19th National Congress of the Communist Party of China and the Fifth National Financial Work Conference made major arrangements for reforms in the financial sector, requiring resolute battles to prevent and resolve major financial risks, and established the State Council Financial Stability and Development Committee, and drafted major laws and regulations for the financial industry The responsibilities of formulating the basic system of prudential supervision are included in a series of major contents of financial reform such as the People’s Bank of China.
The Fourth Plenary Session of the 19th Central Committee of the Communist Party of China clearly proposed to build a modern central bank system.
On this basis, the Party Central Committee and the State Council have put forward new requirements for the PBC’s performance of duties, such as strengthening macro-prudential management and systemic financial risk prevention, coordinating the supervision of systemically important financial institutions, financial holding companies, and important financial infrastructure, and coordinating responsibility Comprehensive statistics of the financial industry, and increased penalties for financial violations.
These contents need to be fully reflected in the "People's Bank of China Law" to provide legal protection for the reform.
(2) Promote structural reforms on the financial supply side to prevent and resolve the need for systemic financial risks.
In recent years, the economic and financial situation has undergone major changes, the scale of financial markets has expanded rapidly, financial innovations have emerged one after another, financial services have been cross-integrated, and Internet finance has developed rapidly.
At the same time, phenomena such as cross-contagion of financial risks and insufficient financial services to the real economy exist to varying degrees, and the monetary policy transmission mechanism still needs to be further dredged.
In order to better adapt to the high-quality development of the social economy, the Party Central Committee proposed structural reforms on the financial supply side, requiring the implementation of new development concepts, strengthening financial service functions, balancing the relationship between stable growth and risk prevention, accurately and effectively handling risks in key areas, and deepening Financial reform and opening up will enhance the ability of financial services to serve the real economy.
In order to better implement the reform requirements, it is necessary to improve the financial macro-control system, improve the monetary policy and macro-prudential policy dual-pillar control framework and countercyclical adjustment mechanism, establish a systemic risk handling mechanism, and maintain financial stability.
It is necessary to amend the law to implement the new responsibilities of the People's Bank of China, improve the performance measures, promote the high-quality development of the financial industry under the legal framework, and create a good financial environment for social and economic development.
(3) In line with the trend of international financial regulatory reform.
Since the 2008 international financial crisis, countries have begun to re-examine the role of central banks, generally strengthening the central bank’s role in strengthening macro-prudential management and maintaining financial stability from the legal level, and highlight the central bank’s role in preventing and resolving systemic financial risks.
In dealing with the financial crisis, the central banks (monetary authorities) of many countries have implemented changes, added new responsibilities, and innovated regulatory methods.
For example, the US "Dodd-Frank Act" extends the Fed's regulatory responsibilities to systemically important banks and non-bank financial institutions.
The "Financial Services Act 2012" of the United Kingdom established the Financial Policy Committee and the Prudential Supervision Bureau within the Bank of England. The former is responsible for macroprudential policy formulation, identification and prevention and resolution of systemic financial risks, and the latter is responsible for prudential supervision of financial institutions.
The People's Bank of China earnestly tracks and studies the developments of international financial regulatory reforms, and summarizes the useful experience in accordance with my country's national conditions, which is reflected in the revision of the People's Bank of China Law.
2. The main work and general ideas of the revision of the "People's Bank of China Law"
The People's Bank of China attaches great importance to the revision of the "People's Bank of China Law", organizes specialized personnel to conduct in-depth research on issues related to the revision of the law, conducts many field investigations, follows up on relevant international experience for a long time, and drafts the revised draft.
From October 2019 to July 2020, we successively solicited opinions from relevant departments of the central and state agencies, as well as industry experts and scholars.
On the basis of fully absorbing all opinions, the "Draft for Soliciting Comments" was revised and formed.
The general idea of revising this law is: guided by Xi Jinping’s thoughts on socialism with Chinese characteristics in a new era, in accordance with the 19th National Congress of the Communist Party of China, the Fourth Plenary Session of the 19th Central Committee, the Fifth National Financial Work Conference and General Secretary Xi Jinping’s important expositions on financial work The spirit and requirements are closely focused on the three tasks of serving the real economy, preventing and controlling financial risks, and deepening financial reforms to build a modern central bank system.
One is to adhere to the combination of domestic practice and international experience.
Based on my country’s national conditions, and on the basis of summarizing the practical experience of financial macro-control and risk management in recent years, the mature and effective system shall be reflected in the amendment of the law, and the advanced experience of central bank legislation and relevant international standards after the crisis will be fully used for reference. .
The second is to always adhere to the problem orientation to ensure that the reform is targeted.
We will maintain the stability of the currency, keep the currency gate, resolutely fight the battle against major financial risks, maintain economic and social security and stability, continue to strengthen private small and micro enterprises and tackle poverty alleviation financial services, and guide finance to better serve the real economy and other major issues. The core and main line of the reform run through the entire process of law revision.
The third is to adhere to the policy orientation of marketization and rule of law.
Give full play to the decisive role of the market in the allocation of financial resources, improve market-based control methods, promote the two-way opening of the financial industry, reduce and eliminate unnecessary administrative constraints, improve the efficiency of resource allocation, and continuously optimize the business environment.
At the same time, adhere to the bottom line of no systemic financial risks, improve the administrative supervision system, improve the system grasp, strengthen the responsibility of market entities, and strict regulatory requirements.
3. The main content of the "Draft for Soliciting Comments"
The "Draft for Solicitation of Opinions" includes general rules, organizational structure, RMB, business, supervision and management responsibilities, supervision and management measures, financial accounting, legal responsibilities and supplementary provisions, with a total of 9 chapters and 73 articles.
(1) Emphasize that financial services serve the real economy and strengthen financial macro-control.
The "Draft for Comments" clearly writes "promoting financial services to the real economy" into the legislative purpose, guiding the financial system to return to its fundamental positioning of serving the real economy.
In order to better carry out financial macro-control and serve the high-quality development of my country’s economy, the "Draft for Comments" starts from the overall situation, clarifies the role of the People’s Bank of China in formulating and implementing macro-prudential policies, and improves the effectiveness of monetary policy and credit policy supervision ( Article 1, Article 2, Article 33).
(2) Implement the new duties and requirements of the Party Central Committee and the State Council on the People's Bank of China.
In accordance with the Party and State Institutional Reform Plan, the State Council Institutional Reform Plan, and the People’s Bank of China’s “Three Decisions” plan, the "Draft for Solicitation of Comments" revised and improved the responsibilities of the People’s Bank of China, clearly formulated drafts of major laws and regulations in the financial industry, formulated basic prudential supervision systems, and took the lead Responsible for systemic financial risk prevention and emergency response, three "coordination", organization and implementation of national financial security reviews, etc.; implement the responsibilities of the Office of the Financial Stability and Development Committee, and strengthen supervision coordination and information sharing (Articles 5 and 10).
(3) Establish a two-pillar regulatory framework for monetary policy and macro-prudential policy.
The "Draft for Comment" has improved the monetary policy toolbox, moderately increased the flexibility of monetary policy tools, and ensured that monetary policy control is scientific, reasonable and effective (Article 25).
In order to fill the gaps in the macro-prudential policy system, the "Draft for Comments" establishes a macro-prudential policy framework, clarifies the macro-prudential policy objectives, focuses on strengthening countercyclical adjustment and penetrating supervision, and improves countercyclical capital buffers and risk reserves for financial institutions Macro-prudential policy toolboxes such as, stress testing (Article 4, Article 34).
(4) Improve the overall supervision system for systemically important financial institutions, financial holding companies and important financial infrastructure.
Clarify the evaluation, identification, monitoring and analysis, consolidated supervision, and the formulation and implementation of recovery and disposal plans for systemically important financial institutions.
Clarify the approval and supervision regulations of financial holding companies.
Clarify the construction planning, identification, inspection, evaluation, and supervision of important financial infrastructure (Article 35, Article 36, Article 39, Article 54).
In addition, the "Draft for Soliciting Opinions" also improved the comprehensive statistical management and information reporting regulations of the financial industry (Article 40).
(5) Further play the role of the People's Bank of China in maintaining financial stability and preventing and handling systemic financial risks.
The "Draft for Comments" stipulates that the People's Bank of China will monitor and evaluate the overall soundness of the financial system, take the lead in preventing and dissolving systemic financial risks; establish a clear financial risk handling responsibility system, and improve systemic financial risk handling measures, including supervision issues Institutions implement self-rescue, implement debt write-downs to creditors in accordance with the law, provide liquidity support, establish special-purpose entities, etc. (Article 37, Article 55).
(6) Improve RMB management regulations.
The "Draft for Comments" stipulates that RMB includes physical and digital forms, providing a legal basis for the issuance of digital currency; preventing virtual currency risks, and clarifying that any unit or individual is prohibited from making and selling digital tokens (Articles 19 and 22) ).
(7) Improve the governance system of the People's Bank of China.
Continue to adhere to the principle that the People's Bank of China does not directly subscribe or underwrite treasury bonds and other government bonds, and does not provide loans to local governments (Article 32).
In order to ensure the continued health and stability of the central bank's balance sheet, the "Draft for Comments" stipulates that the People's Bank of China shall formulate a central bank accounting system and an independent financial budget management system, report to the State Council for approval and organize implementation, maintain openness and transparency, and accept audit supervision in accordance with the law; Financial buffer and profit distribution system to increase the ability to respond to financial risks (Articles 57 to 59).
(8) Improve the means of the People's Bank of China for performing duties, and increase penalties for financial violations.
Persisting in performing duties according to the law is an inherent requirement of the modern central bank system. The "Draft for Solicitation of Comments" is based on the principle of administration according to law, enhances the ability of the rule of law, improves the regulations on inspection, supervision and supervision measures required by the People's Bank of the People's Bank to perform duties, and adds a deadline for rectification and rectification commitment system (Article 47 to Article 50, Article 56, Article 66).
In response to the low cost of illegal acts in the financial market, the "Draft for Comments" has increased the penalties for financial illegal acts, stipulating that serious illegal acts can be punished more severely, and the maximum fine is increased to 20 million yuan; The agency added punishment measures such as ordering business suspension, revocation of licenses, and market bans (Article 61).