The Ministry of Finance requires state-owned financial institutions to conduct comprehensive financial operations in a prudent and orderly manner
Establish a risk isolation mechanism to effectively prevent and control risks
Reporter Wan Jing
In order to standardize the governance and development of state-owned financial institutions, the Ministry of Finance recently issued the "Notice Concerning State-owned Financial Institutions’ Focus on Main Businesses, Reduction of Levels and Other Related Matters" (hereinafter referred to as the "Notice"), requiring state-owned financial institutions to clarify their development strategies and follow the prominent main business, To meet the requirements of professional and internal divisions, carry out comprehensive financial operations in a prudent and orderly manner, "clean up the portal", standardize the management of subsidiaries at all levels, return to the industry, strictly consolidate management and penetration management, regulate related transactions, and strengthen goodwill Brand management promotes the sustained and healthy operation of state-owned financial institutions.
Improve the authorized operation system
In recent years, my country’s financial regulatory authorities have made great efforts to control the barbaric growth of various “unlicensed and illegal driving” financial institutions in the financial sector, and severely investigate and deal with financial institutions that engage in illegal and even illegal financial activities.
Through hard work, various financial chaos have been effectively contained, various illegal operations and illegal financial activities have been effectively managed, financial security and stability have been effectively maintained, financial risks have shifted from a divergent state to a convergent state, and financial funds have been basically contained and transformed. The situation of real to virtual, more financial funds flow to the real economy.
This time, the Ministry of Finance has specifically targeted the internal hierarchical management of state-owned financial institutions.
The notice requires that competitive state-owned financial institutions should establish an industry catalog based on their development strategy, support the advantages and limit the disadvantages, resolutely withdraw from areas that deviate from their main responsibilities and have no financial returns for a long time, and promote the accumulation of capital in their core businesses.
The notice clarified that the legal person level of state-owned financial institutions should be commensurate with their own capital scale, operation and management capabilities, and risk control level. Except for financial investment and operation companies, including the level of state-owned financial institutions, the level of legal persons that actually conduct business operations shall not in principle More than three levels.
State-owned financial institutions shall, in accordance with the principle of "remitting and receiving", promote subsidiaries at all levels to improve the authorized operation system and strictly implement the authorized management system.
Gao Qinwei, a professor at the Central University of Finance and Economics School of Law, believes that the prevention and control of financial risks must be based on both the symptoms and the root causes, active offense and defense, and active response.
Financial institutions should return to the origin of financial business, obey and serve the needs of economic and social development, and prevent finance from deviating from the original track and amplifying financial risks.
The key is to optimize the structure, improve financial institutions, and standardize the authorization management system.
The above-mentioned notice of the Ministry of Finance guides state-owned financial institutions to focus on their main businesses and reduces the hierarchy, which helps to improve decision-making efficiency, strengthen the control of state-owned capital, and improve regulatory efficiency.
At present, my country has entered a stage of high-quality development. It is necessary to avoid state-owned financial institutions from blindly spreading their stalls, reduce homogenous competition among state-owned financial institutions, and accelerate the construction of a diversified and differentiated financial market competition environment.
Strengthen related transaction management
The notice also made clear requirements for risk control and isolation, and penetrating management of connected transactions.
For example, state-owned financial institutions should implement consolidated management of subsidiaries that have actual control rights. The specific situations include four types: First, state-owned financial institutions should conduct penetrating management of subsidiaries at all levels of holding and actual control, and nominate equity in accordance with the law. Directors serve as directors in their key subsidiaries. According to the unified regulation of state-owned financial capital management, they implement financial management, performance appraisal, salary management, total wages, property rights management and other related matters in accordance with the consolidated standards.
Second, state-owned financial institutions should establish an effective risk isolation mechanism internally, and reasonably isolate the cross-service, inter-bank exchanges, information sharing, operating background, and shared business facilities among their subsidiaries to effectively prevent and control risks.
Third, state-owned financial institutions should strengthen the management of related party transactions, establish a related party transaction reporting system, and ensure that related party transactions are in compliance with laws and regulations, open and transparent, and must not conceal related party transactions and the true destination of funds through various means, and must not carry out improper transfer of benefits through related party transactions. Evasion of regulatory requirements, and must not violate fair competition rules or disrupt market order.
Fourth, state-owned financial institutions should strictly manage internal financing, guarantees and other matters to prevent invalid funds from idling and avoid the breeding of false transactions.
Professor Shi Zhengwen, director of the Finance and Taxation Law Research Center of China University of Political Science and Law, analyzed and pointed out that there are currently state-owned financial institutions that carry out diversified business through multi-level mergers and acquisitions, nesting, and the establishment of financial holding groups. Under penetration, it is difficult to discover the associations and risks without penetrating management and supervision.
In reality, there are many companies that have blindly expanded into the financial industry, lack of isolation mechanisms, hidden equity structures, cross-shareholdings, circular capital injections, and false capital injections.
Once the accumulated bubble bursts, it will not only threaten the business of the financial institution itself, but will also trigger a chain crisis of the enterprise and fall into a vicious circle of cross-transmission of financial industry risks and industrial risks.
Through comprehensive, continuous and penetrating supervision of the capital, governance and risks of financial holding companies, and further strengthening the overall corporate governance and risk control of the group, standardizing business behaviors and better isolating risks is to improve the quality and efficiency of financial services in the real economy Strong move.
Sale of loaned names is strictly prohibited
In recent years, reputation management has gradually become an increasingly important part of the development process of financial institutions, and it also helps prevent the spread of certain risk events from causing greater adverse effects.
The notice clarified that state-owned financial institutions should strengthen reputation management. In principle, they must not use institution names, special abbreviations, trademark signs, etc., in institutions that do not have actual control rights and are not included in consolidated management. It is strictly forbidden to sell loan names and name operations.
Financial institutions are an industry with operational risks. Good reputation risk management plays an important role in enhancing the competitive advantages of commercial banks and other financial institutions, improving profitability and achieving long-term strategic goals.
Regulators have repeatedly emphasized the importance of information disclosure.
This notice emphasizes that state-owned financial institutions should strengthen information disclosure, and, within the scope of non-confidential matters, promptly publish on the official website the list of subsidiaries at all levels, as well as the list of institutions that use institution names, special abbreviations, trademarks, and other signs, and Do real-time updates.
The Ministry of Finance also strictly ordered the financial institutions of various countries not to make false capital injections and recycle capital injections.
The notice emphasized that state-owned financial institutions’ capital contributions to their subsidiaries at all levels should comply with laws and regulations, and the source of funds should be true self-owned funds.
State-owned financial institutions and their subsidiaries at all levels are not allowed to make false capital injections, revolving capital injections, and generally cannot use equity pledges for financing.
Except for financial investment, subsidiaries of state-owned financial institutions at all levels are not allowed to hold equity in the parent company in reverse, and subsidiaries of state-owned financial institutions at all levels are not allowed to cross shareholding.
Gao Qinwei believes that the frequent occurrence of financial chaos such as "campus loans" has a huge impact on social life and financial order.
After in-depth reflection, it is found that violating the origin of service is an important factor causing financial chaos.
The key to the financial industry is to serve the real economy. The two prosper and coexist. However, with the continuous development of the social economy, more financial companies have begun to serve the virtual economy, such as financial securities and financial credit. This has led to the lack of financial support for the real economy and financial difficulties. solve.
This notice clearly stated that the goals of returning to the original industry, becoming more professional, and internally part of the industry are to grasp the key to regulating the financial order at present.