The relevant regulatory documents have been passed-
my country's financial holding company will implement access management
Economic Daily·China Economic Net reporter Yao Jin
The State Council executive meeting held on September 2 passed the "Decision on Implementing the Access Management of Financial Holding Companies", which means that a certain threshold will be required to establish a financial holding company in my country.
Experts said that the meeting released a signal to regulate industry development, effectively prevent financial risks, and guide financial holding companies to improve their ability to serve the real economy. It indicates that the new regulatory regulations for domestic financial holding companies may soon be implemented.
The State Council executive meeting held on September 2 passed the "Decision on the Implementation of Access Management for Financial Holding Companies", clarifying that non-financial enterprises, natural persons, etc. hold or actually control two or more different types of financial institutions, and hold or actually control If the total assets of the financial institution meet the requirements, it should apply for the establishment of a financial holding company.
The meeting requested that the supervision of financial holding companies should be implemented in a stable and orderly manner in accordance with laws and regulations, to prevent and resolve risks, and to enhance the ability of financial services to serve the real economy.
Industry insiders believe that setting a certain threshold for financial holding companies is a prerequisite for their stable operation in the future, and is also in line with international practices.
Strictly control market access
"In recent years, the degree of marketization in my country's financial industry has continued to increase, and the business model has shifted from separate operations to integrated operations. In this process, some non-financial companies have invested in multiple and multiple types of financial holdings through initiation, mergers, and equity participation. Institutions, forming a financial holding company." said Wang Xun, a senior researcher at the Digital Finance Research Center of Peking University.
In the absence of restraint, although my country's financial holding companies have developed rapidly, the accumulated risks have planted hidden dangers in the entire financial system.
Wang Xun said that the incomplete industry risk isolation mechanism has led to the continuous accumulation and exposure of financial risks, and brought cross-organization, cross-market, and cross-business contagion risks.
The person in charge of the relevant department of the People's Bank of China once said that it is very necessary and urgent for financial holding companies to strictly control market access.
The implementation of access management is an important measure to strengthen the source control of financial risks.
Strictly control market access, especially the administrative license for the establishment of financial holding companies, so that eligible market entities such as good business conditions, standardized corporate governance, appropriate leverage, and pure investment motives can establish financial holding companies and conduct operations in compliance with laws and regulations; At the same time, strict market access also makes it impossible for those who violate laws and regulations with complex and opaque equity relationships, high-leverage investments, weak risk control, and disrupt financial order to use financial holding companies as a platform to intervene in the operations of financial institutions and to extract funds from financial institutions. , Accumulate hidden dangers of financial risks.
At the same time, the implementation of supervision of financial holding companies in accordance with the law can improve the authority and effectiveness of supervision, strictly regulate the development of financial holding companies, and promptly correct violations of laws and regulations.
In addition, the establishment of market access is also in line with international practices and regulatory reform trends.
From the perspective of international regulatory practice, the United States, Japan, South Korea and other countries and regions all have special legislation for financial holding companies, which clearly requires the implementation of market access supervision on financial holding companies, which reflects the concept that the financial industry is a franchise industry.
Regarding the administrative licensing of financial holding companies, the State Council will make a decision in accordance with the law.
"The meeting clarified the access of financial holding companies, releasing signals to regulate industry development, effectively prevent financial risks, and guide financial holding companies to improve their ability to serve the real economy. It indicates that the new regulatory regulations for domestic financial holding companies may soon be implemented." Zhou Maohua, an analyst at the Bank’s Financial Markets Department, said in an interview with a reporter from the Economic Daily.
Zhou Maohua believes that in recent years, my country's financial holding companies have developed rapidly, and some industry chaos have also been exposed.
Standardizing and strictly controlling access to financial holdings is conducive to filtering out irregular operations, lack of capital constraints, insufficient risk control, impure investment motives, disrupting financial order, violations of laws and regulations and other investors, reducing cross-institutional and cross-market risk contagion, and preventing Potential financial systemic risks.
At the same time, it can also encourage financial holding companies to conduct business in accordance with laws and regulations, return to the source of finance, safeguard the legitimate rights and interests of financial institutions and investors, promote the healthy development of the industry, and enhance the ability of financial services to serve the real economy.
Take a good development balance beam
"The rapid development of financial holding companies in my country is conducive to meeting the needs of various enterprises and consumers for diversified financial services, and improving the ability to serve the high-quality development of the economy. However, in practice, there are some financial holding companies, mainly non-financial enterprises. The financial holding company blindly expands into the financial industry, and risks continue to accumulate and expose." The head of the relevant department of the central bank once said.
"There are many reasons why non-financial institutions set up financial controls. For example, non-financial companies can use financial platforms to allow their subsidiaries to generate synergies and improve the efficiency of capital use; corporate investment diversification can improve corporate profitability; companies can use financial control platforms to connect Capital market functions, etc." Zhou Maohua said, this may cause risks such as irregular internal governance, cross-contagion of risks, lack of capital constraints, excessive leverage and expansion, complex equity structures, improper corporate intervention in the operations of financial institutions, related transactions, and benefit transmission.
Lian Ping, chief economist and dean of the research institute of Zhixin Investment, believes that the brutal growth of financial holding companies will increase the risk of the financial system when relevant laws and regulations are not sound and an effective regulatory system has not been established.
For example, during the 2008 international financial crisis, compared with the hard-hit investment banks with single businesses such as Lehman and Bear Stearns, comprehensive financial groups such as HSBC and Citigroup also suffered different degrees of losses, but they showed relatively Strong anti-risk ability.
In response to the aforementioned hidden risks, the central bank issued the "Trial Measures for the Supervision and Management of Financial Holding Companies (Draft for Comment)" in July last year.
In view of the characteristics of the financial holding group's diverse business types, complex shareholding structure, and high risk of connected transactions, the draft for comments establishes the principles of macro-prudential management, penetrating supervision, and coordinated supervision.
“Financial holding companies are enterprises that specialize in equity investment and management of financial institutions. They must not engage in non-financial businesses to strictly isolate the financial sector from the industrial sector and effectively prevent cross-contagion of risks.” The person in charge of the relevant department of the central bank said that in practice, some companies The non-financial business that the group engages in is closely related to the group and the financial institutions it controls. For example, financial technology is very important for the development of auxiliary financial services. International regulatory practices generally allow financial holding companies to invest in auxiliary financial business activities under certain limits.
For this reason, under the premise of strictly isolating risks, the consultation draft allows financial holding companies established by enterprise groups to invest in institutions recognized by the financial management department to be related to financial services, but in principle, the book value of the total investment shall not exceed the financial holding company 15% of net assets.
Experts believe that while strengthening the supervision of financial holding companies, how to further maintain the balance between innovation and stability, long-term development and preventing short-term risks is still worth exploring.
"At present, my country's financial technology has been at the forefront of the world. While strengthening the supervision of financial holding companies, how to maintain a balance between innovation and stability, so as to manage short-term risks, but also focus on the long-term, and not rely on financial efficiency and competitiveness. The cost of loss is still worthy of further exploration. In addition, in the determination of regulatory indicators such as regulatory boundaries, capital adequacy ratio, liquidity risk, and related transactions, full consideration should be given to the specific circumstances of the financial holding company." Wang Xun said.