Vice Chairman of China Banking and Insurance Regulatory Commission: Financial innovation must be carried out under the premise of prudential supervision

  China News Service, Shenzhen, December 20 (Reporter Wang Enbo) Cao Yu, vice chairman of the China Banking and Insurance Regulatory Commission, said in Shenzhen on the 20th that effective control and isolation of risks is an important prerequisite for the construction of China's capital market.

Among them, financial innovation must be carried out under the premise of prudential supervision.

  This is what Cao Yu said at the first financial summit of Shenzhen Pioneer Demonstration Zone and China Wealth Management 50 Forum 2020 held that day.

  He pointed out that for a long time, China's banking and insurance industries have insisted on participating in the construction of the capital market in accordance with the law, and have become an important part of institutional investors, providing the market with a stable and professional source of funds.

  Bank wealth management actively invests in the capital market through direct or indirect means. As of the end of October this year, wealth management funds have invested nearly 17 trillion yuan in stocks and bonds (RMB, the same below), and the market share has remained stable for a long time.

Insurance funds take listed companies as important investment targets, directly or indirectly investing about 10 trillion yuan in various stocks and bonds.

Trust companies invest approximately 2.2 trillion yuan in stocks and bonds through their own funds and trust products.

  Talking about how to promote the development of the capital market, Cao Yu said that for a long time, China has always adhered to the financial management system of separate operation, which has effectively realized the risk isolation between the direct financing and indirect financing systems, and has provided relatively stable economic development. The financial environment reflects the advantages of the system in line with national conditions.

  He said that to develop direct financing and give full play to the function of the capital market, it is necessary to persist in the separate operation system.

We must always build a "firewall" between the direct financing and indirect financing systems, not only must give full play to their respective advantages, coordinate cooperation, and common development, but also strictly control risk cross-contagion to avoid greater market shocks.

As for the risks that appear in the capital market, it is necessary to strictly follow the principles of marketization and rule of law to deal with, and fully reflect the operating mechanism of the capital market to discover and share risks.

  At the same time, Cao Yu emphasized that to clearly define the responsibility boundaries of market entities, it is necessary to highlight the performance of duties and to avoid offside responsibility.

Financial innovation must be carried out under the premise of prudential supervision, and whether it is beneficial to support the real economy, whether it is beneficial to prevent financial risks, and whether it is beneficial to protect the legitimate rights and interests of investors as the measurement standard.

Standardize the innovation behavior of the capital market and maintain the orderly, transparent and efficient operation of the market.

(Finish)