Finance helps the economy to be stable and far-reaching (authoritative interview)
——Interview with Guo Shuqing, Secretary of the Party Committee of the People's Bank of China and Chairman of the China Banking and Insurance Regulatory Commission
During the prevention and control of the new crown pneumonia epidemic, the financial system actively adopted a number of policy measures, increased money and credit, improved financial supervision policies, and provided strong support for the overall promotion of epidemic prevention and control and economic and social development. At the end of June, the broad money supply M2 increased by 11.1% year-on-year, and the scale of social financing increased by 12.8% year-on-year. The growth rate was significantly higher than the same period last year. In the first half of the year, new RMB loans accumulatively increased by 12.09 trillion yuan, a year-on-year increase of 2.42 trillion yuan.
What is the current situation of my country's banking and insurance industry? In the next step, how can financial institutions support stable enterprises and ensure employment? In which areas will the banking and insurance industry deepen reform and open up? The reporter interviewed Guo Shuqing, Secretary of the Party Committee of the People's Bank of China and Chairman of the China Banking and Insurance Regulatory Commission, on related issues.
●The overall operation of my country's financial industry is stable and the risks are controllable, but the potential risks are still high. It is necessary to stay sober, calmly judge, bottom line thinking, and take precautions
Reporter: Since the beginning of this year, the epidemic has had a huge impact on my country's economy and the world economy. How is the overall operation of my country's financial industry?
Guo Shuqing: During the period of epidemic prevention and control, the international financial market fluctuates violently, and my country's financial industry also encounters greater difficulties and challenges. However, my country's financial market has withstood the test of the complex situation, and the stock market, bond market, and foreign exchange market have shown strong resilience and anti-risk capabilities.
At present, the overall operation of my country's financial industry is stable, risks are controllable, the banking and insurance industry is developing well, the business structure is optimized, and the main operating and regulatory indicators are in a reasonable range. As of the end of the second quarter, the total assets of my country's financial industry were approximately 340 trillion yuan, a year-on-year increase of 10%. Among them, the total assets of the banking industry increased by 9.7% year-on-year to 309 trillion yuan, RMB loans increased by 13.2% year-on-year, and corporate bond investment increased by 28.5% year-on-year. The total assets of the insurance industry were 22 trillion yuan, a year-on-year increase of 12.7%, of which bond investment increased by 16.5% year-on-year, long-term equity investment increased by 18.2% year-on-year, and the proportion of short-term investment declined. The ability to provide medium- and long-term financing for the real economy continued to improve.
However, it should also be noted that some potential risks in my country's financial industry are still relatively large. It is necessary to stay sober, calmly study and judge, bottom line thinking, and take precautions. First, the existing risks have not been completely resolved. Some financial institutions have had a heavier historical burden and a large gap in capital and provision. Under the impact of the epidemic, operating risks have become more prominent. Second, rising pressure on non-performing assets is increasing, and risks are likely to accelerate. Third, market chaos is prone to rebound under the background of loose funds, and some high-risk shadow banking businesses have come back with new looks. Fourth, the epidemic has accelerated the adjustment of the global economic and financial structure, uncertainties and unstable factors have increased, and external input risks have increased.
In accordance with the new situation and new conditions, the financial management department will maintain regulatory power, optimize regulatory measures, deal with violations of laws and regulations in accordance with the law, and improve the quality and efficiency of serving the real economy.
●The growth rate of broad money supply and the scale of social financing is significantly higher than last year, and new manufacturing loans hit a record high
Reporter: Since the beginning of this year, the financial management department has introduced a number of measures to provide strong support for epidemic prevention and control and economic and social development. What effect has it achieved so far?
Guo Shuqing: During the epidemic prevention and control period, under the strong leadership of the Party Central Committee and the State Council, the Financial Committee took the lead, and the financial management department adopted a series of strong policy measures to increase effective capital supply, optimize the structure of credit investment, and reduce corporate financing costs. Monetary policies, regulatory policies, and fiscal, employment, industrial, and regional policies have made concerted efforts to do everything possible to help companies relieve their difficulties and fully support epidemic prevention and control and economic and social development.
The People's Bank of China has lowered the deposit reserve ratio three times, increased the re-loan rediscount quota of 1.8 trillion yuan, and increased the total monetary and credit policy support. The financial management department timely introduced the small and micro enterprise credit loan support plan and the phased deferred principal and interest payment policy, and provided financing support for 6.12 trillion yuan of mature corporate loans.
At the end of June, the broad money supply M2 increased by 11.1% year-on-year, and the scale of social financing increased by 12.8% year-on-year. The growth rate was significantly higher than the same period last year. In the first half of the year, new RMB loans accumulatively increased by 12.09 trillion yuan, a year-on-year increase of 2.42 trillion yuan. These funds are mainly invested in key areas and weak links such as manufacturing, infrastructure, technological innovation, small and micro businesses, and "agriculture, rural areas and farmers". At the end of June, loans to inclusive small and micro enterprises increased by 28.4% year-on-year, and the balance of loans to inclusive small and micro enterprises from five large banks increased by 34.6% compared with the end of the previous year. From January to June, the average interest rate of inclusive loans to small and micro enterprises by the five large banks was 4.27%, which was 0.43 percentage points lower than the average interest rate for the whole year of 2019. Measures such as issuing credit loans, assuming or reducing or exempting credit-related expenses, etc. Other financing costs of enterprises were 0.64 percentage points, and the total cost of credit financing fell by 1.07 percentage points. Research and technology loans increased by 26.95% year-on-year, and new manufacturing loans reached a record high. Corporate credit loans increased by 13.8% year-on-year, and medium- and long-term loans increased by 13.4% year-on-year, both higher than the average growth rate of loans. Financial institutions actively participated in bond market investment. In the first half of the year, non-financial sector bond financing reached 7.12 trillion yuan. The insurance industry gave full play to its protection role. In the first half of the year, the compensation expenditure was 630.8 billion yuan, and the balance of insurance funds utilization increased by 15.9% year-on-year.
●Better combine stabilizing enterprises to ensure employment and serving private, small and micro enterprises
Reporter: In the next stage, what measures will the financial management department take to support the development of the real economy, stabilize enterprises and ensure employment?
Guo Shuqing: The financial management department will conscientiously implement the spirit of General Secretary Jinping’s important speech at the entrepreneur’s forum on July 21, and in accordance with the work requirements of the “six stability” and “six guarantees”, it will stabilize enterprises and ensure employment and serve private, small and micro enterprises. Enterprises are better integrated and go all out to promote economic and social recovery to normal cycles.
At present, the ratio of small and micro enterprises nationwide to obtain bank loans exceeds 2/3, which is among the highest in the world. The improvement of financial services for small and micro enterprises is not only due to the change in the concept of banking services, but more importantly, banks make full use of big data, cloud computing and artificial intelligence, etc., to greatly enhance the ability of small and micro financial services and risk control. We encourage commercial banks and policy banks to strengthen cooperation with Internet banks, so that policy banks can provide more on-lending funds for Internet banks and benefit more small and micro enterprises.
This year, the financial system will give 1.5 trillion yuan in profits to various enterprises. We will implement various financial relief policies and do everything possible to reduce corporate financing costs. At present, the balance of renminbi loans is 165 trillion yuan, and the loan interest rate drops by an average of 1 percentage point to 1.65 trillion yuan. Coupled with the reduction or exemption of some fee items, it is completely conditional to realize 1.5 trillion yuan in profit.
●Fix asset quality classification, replenish capital, raise sufficient provisions, increase non-performing disposal efforts, and strictly control incremental risks
Reporter: Earlier, you mentioned that you have to deal with the risk of increasing pressure on non-performing assets. What measures will the China Banking and Insurance Regulatory Commission take?
Guo Shuqing: The current economic situation is still complex and severe, with greater uncertainty and instability. There is a certain time lag in financial risk exposure. For some companies that defer debt and interest payments, the non-performing loans formed in the future have not yet fully emerged, and the pressure on non-performing assets to rise is greater. .
In this regard, we must pay close attention, plan ahead, and actively respond.
One is to classify the quality of real assets. Supervise banks to use the expected credit loss method to assess loan risks, accurately classify assets, and truly reflect loan quality. In terms of policy orientation, it is not easy to use the level of defective rate as the only criterion for evaluating the quality of operation. The second is to replenish capital and raise sufficient provisions. Banks are required to adopt a variety of methods to replenish capital, increase provisioning, and improve future risk resistance. The third is to increase the intensity of bad disposal. The regulatory requirements for provision coverage will be lowered in phases, and all resources will be released to deal with non-performing products. In accordance with the principles of account write-off, case deposit, and ownership, in the assessment of agriculture-related, inclusive, etc., it is allowed to restore the non-performing loans that have been disposed of. Allow insurance asset management companies, financial asset investment companies, etc. as new entities to cooperate with banks to explore new ways to dispose of non-performing assets. We will carry out pilot projects for the transfer of non-performing loans from single households to companies and batches in an orderly manner, and explore the establishment of a unified non-performing asset trading platform. The fourth is to strictly control incremental risks. Supervise banks to strengthen internal control and risk management, do a good job in the "three checks" of loans, and prevent the excessive increase of new non-performing loans.
●Deepen the reform of small and medium-sized banks to supplement the capital of small and medium-sized banks; strictly manage shareholder qualifications, regulate shareholder behavior and related transactions, and strictly prevent manipulation by large shareholders and insider control
Reporter: my country is unswervingly deepening reform and opening up in the financial sector. How will we continue to promote reform and opening up in the next step?
Guo Shuqing: In recent years, we have steadily expanded financial opening to the outside world. More than 50 opening-up measures introduced in the past three years have been implemented.
In the next step, we will unswervingly deepen reforms, expand opening up, strive to create a market-oriented, legalized, and international business environment, and improve financial legal construction and financial infrastructure construction.
It is necessary to deepen the reform of key institutions and key areas around the structural reform of the financial supply side.
The first is to focus on accelerating the reform of small and medium-sized banks to enhance the robustness of the financial institution system. Promote the reform and risk mitigation of city commercial banks and rural credit cooperatives. Implement policies in accordance with local conditions and classify them to combine deepening reforms with mitigating risks and improving governance. Not long ago, with the approval of the State Council, the six departments issued documents related to the deepening of reforms and capital replenishment of small and medium banks, allowing local governments to issue special bonds to replenish the capital of small and medium banks. In the process of reform, attention should be paid to maintaining the integrity of the local financial organization system, maintaining the overall stability of rural credit cooperatives and rural commercial banks as legal persons in counties, and maintaining the pattern of social capital as the mainstay. Promote large bancassurance institutions to improve their comprehensive financial service capabilities, and optimize the management systems and mechanisms of policy financial institutions, trust companies, and financial asset management companies. Guide insurance to return to the source of risk protection, research and develop the third pillar of pension insurance, and improve my country's pension security system.
Second, improve the modern financial enterprise system with corporate governance as the core. Explore the corporate governance model of bancassurance institutions with Chinese characteristics, and integrate party leadership into corporate governance. Adjust and optimize the shareholding structure, strictly manage shareholder qualifications, regulate shareholder behavior and related transactions, strictly prevent manipulation by major shareholders and insider control, and strengthen supervision of performance of duties and information disclosure.
The third is to support direct financing and promote the optimization of financing structure. In the first half of the year, the proportion of direct financing in China rose from 32% to 36%. In the future, financial institutions such as trust, wealth management and insurance should be guided to establish long-term investment concepts, strengthen professional investment and value investment, and become the backbone of the development of the capital market. Enterprises provide more long-term low-cost direct financing funds.
Our reporter Ouyang Jie and Qu Xinming