For the financial industry, the prevention and control of financial risks is the eternal theme of financial work. Attaching great importance to this issue, the Economic Work Conference and the Financial Work Conference have made a series of systematic arrangements for this. Recently, the general secretary of the first class once again emphasized at the seminar on promoting high-quality financial development for major leading cadres at the provincial and ministerial levels that efforts should be made to prevent and resolve financial risks, especially systemic risks. As for how to do a good job in this regard, Pan Gongsheng, governor of the People's Bank of China, pointed out at the press conference of the State Council New Office held a few days ago that the People's Bank of China will resolutely implement the various arrangements for preventing and resolving financial risks, adhere to the system concept and bottom-line thinking, and keep the bottom line of no systemic financial risks.
Risk prevention and control is the eternal theme of financial work。In the past year, in the face of complex situations and challenges, we withstood external pressure, overcame internal difficulties, successfully completed various development tasks, resolutely maintained the bottom line of no systemic risks, and promoted high-quality economic development. Zeng Gang, director of the Shanghai Finance and Development Laboratory, said in an interview with the Financial Times that the risk disposal and prevention work of small and medium-sized financial institutions, local bonds and real estate are progressing in an orderly manner, not only to resolve short-term risks, but more importantly, to establish a long-term mechanism for risk prevention and a model for the long-term sustainable development of institutions.
However, it must also be noted that in the stage of economic recovery and transformation, the financial industry needs to take into account the multiple goals of risk prevention, stable growth and reform. How to complete this answer sheet with high quality also tests the decision-making wisdom and execution of the financial management department.
For the central bank's overall idea of preventing and resolving financial risks, Pan Gongsheng emphasized the "dynamic balance" at the press conference, that is"At the macro level, we must grasp the dynamic balance between economic growth, economic restructuring and financial risk prevention。The interviewed experts believe that this requires continuous enrichment of the policy toolbox and enhancement of the pertinence and effectiveness of policy measures. In fact, looking back at the monetary and financial policies in 2023, the three lines of stabilizing growth, promoting reform and preventing risks are also consistent.
Continue to make efforts: overcome key points and difficulties
At the moment,China's financial risks are generally controllable, the overall operation of financial institutions is stable, and the financial market is operating smoothly。However, considering that there are still many uncertainties facing the economy and finance, it is necessary to "prevent and control" risks in key areas in advance on the one hand, and to properly and promptly "defuse" risks that have already emerged on the other hand. Pan Gongsheng introduced at the press conference that since last year, various departments and local governments have taken effective measures to actively resolve real estate and local debt risks. Under the guidance of the financial management department, financial institutions have made great efforts to support the stability of financing channels for real estate enterprises, especially leading real estate enterprises. In addition, the local ** debt has a strong regional character, and it is mainly a few underdeveloped regions that face debt repayment difficulties, which have a limited impact on the economic and financial aggregates. The People's Bank of China will continue to cooperate with industry authorities and local governments to do a good job in relevant financial support and risk mitigation. The ** financial work conference held at the end of October 2023 proposed to establish a long-term mechanism for preventing and resolving local debt risks, establish a ** debt management mechanism compatible with high-quality development, and optimize the ** and local ** debt structure. Improve the main body supervision system and capital supervision of real estate enterprises, improve the macro-prudential management of real estate finance, meet the reasonable financing needs of real estate enterprises of different ownership systems without discrimination, make good use of the policy toolbox according to the city's policies, better support the demand for rigid and improved housing, accelerate the construction of "three major projects" such as affordable housing, and build a new model of real estate development. "On the whole, China's local debt level is at the lower level of the middle reaches in the world, and the overall problem is not big, mainly because individual provinces are worth paying attention to. Zeng Gang said that in the past period, financial institutions have promoted the resolution of local debts in an orderly manner to help them effectively restructure and reduce risks. The overall direction is to curb new additions, dissolve stocks, optimize the maturity structure of debt, and reduce debt costs. In addition, Guosen** Wang Jian's team proved by calculating the losses caused to banks by disposing of urban investment risks in the form of restructuring under different scenarios that if the risk of local bonds is exposed, the overall impact on commercial banks is controllable, and it will not have an impact on the overall sustainable development ability of commercial banks. In terms of real estate, since last year, policies have been issued frequently, and 16 measures have been introduced to support the steady and healthy development of real estate, guiding financial institutions to support the reasonable financing needs of real estate enterprises, establishing a dynamic adjustment mechanism for the interest rate policy of newly issued first home loans, and promoting the downward trend of personal housing loan interest rates. Overall, the supply side focuses on broadening the financing of real estate enterprises, especially private real estate enterprises, and actively guides market expectations; On the demand side, policies will be optimized within the framework of "housing for living, not speculation", reducing the cost of housing for residents, and better meeting the demand for rigid and improved housing. Strong supervision: Build a solid safety bottom line for financial power
In the face of complex internal and external situations, the prevention and resolution of financial risks need to be integrated with the service of the real economy.
1. Dynamic balance. Regarding this line of thinking, Pan Gongsheng said at the press conference on the same day that the economy is the foundation of finance, and finance is the mirror reflection of the economy, and many problems in economic operation often overflow from the port of finance and are intertwined with financial risks. "The key to effective risk prevention and control at the source is to grasp the balance between economic growth, economic restructuring and risk prevention, which is what we often call the balance between development, reform and stability. He stressed. Zeng Gang said in this regardSystemic risk is highly correlated with the real economy and is cyclical。He believes that the current risks come from two aspects, one is the cyclical fluctuation of macroeconomic operation, and the other is the liquidation of industries brought about by economic restructuring. From this point of view, the central bank should ensure that the macroeconomic operation is within a reasonable range, and second, it should strengthen transformation support, especially guide financial institutions to do a good job in supporting the "five major articles" to reduce the possibility of potential risks. "Offense is the best defense, and the same is true for the financial industry, and supporting better economic development is actually the best means to reduce financial risks. He said. Strengthening supervision, preventing risks, and promoting development -- comprehensively strengthening financial supervision is one of the priorities of the work of the financial management department in the past many years, and it is also the top priority of China's financial work at present, and it is one of the key core financial elements that a financial power should have. * The financial work conference to comprehensively strengthen financial supervision as one of the main topics, the meeting pointed out that to effectively improve the effectiveness of financial supervision, in accordance with the law will be all financial activities into the supervision, comprehensively strengthen institutional supervision, behavior supervision, functional supervision, penetrating supervision, continuous supervision, eliminate regulatory gaps and blind spots, strict law enforcement, dare to show the sword, and severely crack down on illegal financial activities. Regarding the strengthening of financial supervision, Pan Gongsheng focused on four aspects, namely: First, it is necessary to strengthen the corporate governance and risk management of financial institutions. Second, it is necessary to strengthen financial supervision, and macro-prudential management, micro-prudential supervision, and behavior supervision should each perform their respective duties, cooperate with each other, and form a joint force. Third, it is necessary to promote the construction of financial safety nets, improve risk monitoring, assessment and early warning capabilities, improve the early correction mechanism of financial risks with hard constraints, establish a risk disposal responsibility mechanism with equal rights and responsibilities and compatible incentives, give full play to the role of deposit insurance, industry protection and financial stability protection, and strengthen the professional risk disposal function of deposit insurance. Fourth, strengthen the rule of law guarantee for financial stability, and accelerate the introduction of laws and regulations such as the Financial Stability Law. "Combined with the spirit of the first financial work conference, the central bank has made a more comprehensive and detailed overview of how to do a good job in supervision. In an interview with the Financial Times, Lu Zhengwei, chief economist of Industrial Bank, said that the central bank's statement has sorted out the ideas of strengthening financial supervision in all aspects and in the whole processOne isInternal and external integration, internal emphasis on strengthening internal control and governance, external emphasis on strengthening third-party constraints; The second isThe combination of micro, meso, and macro, and the simultaneous development of micro-prudential supervision, behavior supervision, and macro-prudential management; The third isWeave a network of the whole chain before, during and after the event, early identification, early warning, early exposure, and early disposal of risks, and have methods, mechanisms, and speeds to deal with risks, so as to effectively prevent and resolve financial risks to the greatest extent, and help build a strong country with high-quality financial development. Advance and Defense: Coordinate financial openness and security issues
China's financial sector is developing rapidly and is becoming an increasingly integrated and vital part of the world's financial system. In the process of greater integration and openness, we will inevitably face the problem of how to coordinate openness and security, and "prudent" progress has become the key. The experts interviewed all pointed out that in the long run, China's opening up is an inevitable process and an irreversible trend. This process is often accompanied by potential financial risks, and it is necessary to improve the ability to control the high-level opening up to the outside world to ensure the country's financial and economic security. Zeng Gang said,On the one handIt is necessary to ensure that openness is orderly and controllable, and it is prudent to advance according to actual needs; On the other handIn view of the more complex risks faced by cross-border cross-borders, the level of supervision should also keep pace with the times and adapt to the level of openness. What are the specific aspects of "progress" and "defense" of financial opening, Pan Gongsheng concludedOne isIn recent years, we have promoted the opening up of the financial services industry and financial markets in an orderly manner, and continuously improved the level of cross-border investment facilitation. The second isDeepen the reform of the RMB exchange rate formation mechanism, enhance exchange rate flexibility, and improve the macro-prudential management of cross-border capital flows, so as to maintain the smooth operation of the foreign exchange market. The third isPromote international financial cooperation, actively participate in international financial governance, strengthen multilateral, bilateral and other multi-level dialogue and communication, take the lead in establishing the China-US and China-EU financial working groups, strengthen macroeconomic policy coordination, and jointly consolidate the global financial safety net. Fourth, improve the management measures for data security in the financial industry, so that cross-border data flow will be safer and more convenient, and the rules will be clearer. "Maintaining the basic stability of the RMB exchange rate at a reasonable equilibrium level and enhancing exchange rate flexibility means avoiding the risks brought about by the 'herd effect'. In order to cope with the risks brought by cross-border capital flows, it is necessary to improve the macro-prudential management framework for cross-border capital flows integrating domestic and foreign currencies, and cooperate with micro-supervision. In this regard, Wang Yifeng, chief financial analyst of Everbright, told reporters that in the past period, the central bank has used multiple measures such as the median price guidance mechanism, lowering the foreign exchange reserve ratio, and offshore RMB liquidity management, and at the same time, it has resolutely corrected unilateral and pro-cyclical behaviors, and continued to guide enterprises and financial institutions to establish the concept of "risk neutrality", prevent the risk of exchange rate overshoot, and maintain the basic stability of the RMB exchange rate. Everybody is watching
The economy continues to rebound and improve, and the foundation for the "stability" of the RMB exchange rate in 2024 is solid.
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