**: China Macroeconomic Forum (CMF).
Liu Xiaochun is the vice president of Shanghai New Finance Research Institute
The following views are compiled from Liu Xiaochun's speech at the CMF Symposium on Macroeconomic Hot Issues (80th Session).
* The Financial Work Conference proposed to "accelerate the construction of a financial power". The "strongness" of a financial power should include two aspects: first, a strong ability to support development in finance; Second, it has a strong ability to prevent and defuse financial risks. Finance is the blood of the economy, penetrating into all aspects of the economy, at the same time, financial products and markets are closely related, risks are passed on to each other, so the prevention and resolution of risks itself also carries great risks, and it is necessary to consider the whole situation, so as not to take care of one or the other.
First, to prevent and resolve financial risks, we must first guard the bottom line of financial supervision.
The bottom line of financial supervision is the bottom line of the bottom line against systemic financial risks. In order to maintain the bottom line of preventing the occurrence of systemic financial risks, it is necessary to guard the bottom line of financial supervision in encouraging financial institutions to serve the real economy and do a good job in the five major articles, and to maintain the bottom line of financial supervision in cooperating with macroeconomic regulation and control. This involves the relationship between national economic strategy, macroeconomic regulation and control, and financial supervision. A key point of the current financial regulatory reform is to straighten out the relationship between macroeconomic regulation and control and financial supervision. To maintain the bottom line of preventing systemic financial risks, the most important thing is to maintain the bottom line of financial regulatory policies. Whether in order to cooperate with the implementation of the national economic strategy or to meet the needs of macroeconomic regulation and control, some regulatory indicators and requirements can be adjusted for regulatory policiesHowever, it is not possible to adjust the regulatory policies and regulatory indicators related to the safe operation of financial institutions, nor can these policies and indicators be flexibly implemented in order to cooperate with the national economic strategy and macroeconomic regulation and control. In order to meet the needs of macroeconomic regulation and control for the time being, and in order to resolve the temporary industry risks, the relaxation of regulatory requirements is a temporary measure, but it often buries the hidden danger of systemic financial risks in the future.
Second, in preventing and defusing financial risks, it is necessary to fully realize that risks cannot be eliminated. The ultimate goal of regulation is to keep the market running smoothly.
Laws and regulations, systems, supervision, and the ability of regulators, financial institutions and financial practitioners to prevent and control risks can avoid risks in the operation of financial activities, and when financial risks occur, they can mitigate and resolve risks as much as possible, but it is impossible to eliminate risks. The secret of preventing and mitigating financial risks lies in the ability of financial institutions to improve their business experience and the ability of regulators to improve their supervisory capabilities, so as to ensure that systemic risks do not occur while maintaining the normal operation of finance. Therefore, when a risk occurs, it is not simply to suspend the relevant business or related business category in order to eliminate the risk.
Any financial product or financial business has a beneficial effect on the real economy, and there are several reasons for the risk: 1. The product application is misplaced and not applied to appropriate scenarios, such as the application of personal business loans to mortgage loans; 2. The design of product risk control measures is not perfect; 3. Supervision is not in place; 4. Insufficient risk management ability or dereliction of duty of financial institutions or business personnel; 5. Moral hazard; 6. Insufficient risk preparation cannot cover risks, etc. The suspension of risky business seems to eliminate the risk, but it is not conducive to economic development, and it is an invisible risk. Improvements should be made to address the different causes of risk. In order to do a good job in the "five major articles" in finance, there must be many innovations, and many large and small risks will inevitably appear in the process of innovation. Only by constantly innovating, constantly improving management, and constantly improving supervision can we prevent and resolve risks and make five good articles. In this regard, the idea of the "Basel Accord" is worth learning from. The general idea of the Basel Accord is that a bank should have enough capital to cover all possible risks, so different risk factors are set for different businesses and operations. When a new business risk arises, it is not simply to prohibit such business, but to study the risk logic of such business, and determine the risk coefficient and risk capital requirements. Its purpose is to ensure that the risks incurred by banks can be resolved in a timely manner and the impact can be controlled within a limited range, so as to ensure the normal development and operation of the market.
3. While consolidating local responsibilities for preventing and resolving financial risks, prevent local governments from interfering in the specific operation and management of financial institutions.
Historically, the chaotic actions of individual localities and interference in the specific business operations of small and medium-sized financial institutions have been a source of financial risks. The first financial work conference and the reform of the financial regulatory system, put forward the requirements of compacting the responsibility of local prevention and resolution of financial risks, coupled with the fact that many places are the ultimate investors of local legal person financial institutions, whether in terms of responsibility or legal theory, local governments have the power and responsibility to supervise and manage the personnel and operation of these financial institutions, but the degree of "supervision and management" in the first place, it needs to be clearly stipulated in the future system, that is, it is necessary to clarify the local financial committee, financial working committee, The "powers" and "responsibilities" of the local financial supervision and administration bureau in the management of local corporate financial institutions. Once the degree of "power" and "responsibility" is not properly grasped, it will produce serious regional financial risks.
Fourth, in resolving the risks of small and medium-sized financial institutions, it is necessary to persist in the reform of solving problems and prevent the reform of covering up problems.
Many of the small and medium-sized financial institutions (urban commercial banks and rural commercial banks) that are now in danger are coming from the merger of smaller financial institutions (urban credit cooperatives and rural credit cooperatives), and most of the original mergers are aimed at disposing of and resolving the risks of those smaller institutions. At present, in dealing with and defusing the risks of small and medium-sized financial institutions, it is necessary to study why these institutions have not resolved the risks but have accumulated greater risks after dealing with the original institutional risks, and draw lessons and experience from them. It should be said that mergers and acquisitions are an important way to resolve the risks of small and medium-sized financial institutions. However, mergers and acquisitions must adhere to the principles of marketization and rule of law, reveal and resolve risks, and not leave sequelae for new institutions, so that new institutions can truly improve their operation and management according to the new business model. If we only cover up problems, it will be impossible to carry out market-oriented, law-based mergers and acquisitions, and other reforms, because of the drag of old problems, it is impossible for new institutions to completely change their operation and management models, resulting in the failure to solve old problems, and more problems will accumulate and even greater thunder will explode.
The reason why some small and medium-sized financial institutions are out of risk is that some private shareholders have impure motives for taking shares in financial institutions and hollow out financial institutions. The key to this is to tighten shareholder access and strengthen the supervision of shareholder behavior on a day-to-day basis. At present, there is a tendency in many localities to replace the original private capital of local corporate financial institutions with state-owned capital. Judging from the actual situation, simply replacing private capital with state-owned capital also has its drawbacks, and there are also risks and hidden dangers. First, the capital structure is single, it is not easy to form checks and balances and constraints, and it is not easy to introduce new investors, resulting in the dilemma of capital replenishment; Second, the state-owned capital of many small and medium-sized local corporate financial institutions is generally funded by local state-owned enterprises or finances under the unified arrangement of the local government, and it is not the initiative of these shareholders, and there is no desire to participate and a sense of responsibility in management and supervision, and it cannot play a role in supervision and balance, and it is easy to have insider control risks; Third, high-quality customers in the region are basically shareholders of financial institutions, and their business is related party transactions, which affects the business development and competition of small and medium-sized financial institutions in the local area. Fourth, it is more susceptible to local administrative intervention in specific operations.
Fifth, macroeconomic policy formulation should take into account domestic and international development, and enhance macroeconomic management capabilities.
With the further high-level opening up to the outside world, the international geopolitical struggle is fierce, and international economic fluctuations and changes in foreign macro policies will have a positive or negative impact on China's economy and finance. China's economic fluctuations and policy changes will also have spillover effects on the outside world, which in turn will affect China's economy and finance. Therefore, the formulation of China's macroeconomic policies and the timing and intensity of their promulgation should take into account the domestic and international conditions and their possible impacts.
6. To govern and resolve financial risks, it is necessary to respect the laws of financial business and the risk logic of related businesses, and improve regulatory capabilities.
The biggest feature of finance is that its business is not an isolated existence, it is inextricably linked with the economy and society, and there is also a direct or indirect relationship between financial businesses and financial markets, so any financial risk is not an isolated existence. In the governance, disposal, and resolution of financial risks, we cannot discuss a certain financial risk on a certain financial risk, but must fully consider the impact on other economic sectors and other financial fields in the governance, disposal, and resolution of risks in accordance with the business laws of each financial risk, and take corresponding measures, including what kind of policies to formulate and the pace of policy implementation. For example, if a new business policy is introduced, will it be implemented immediately or will there be a transition period? Whether the new policy is aimed at new businesses, or whether even existing businesses should be rectified, etc. If these details are not handled well, good policies can also create huge systemic risks.