Improving Supervision And Deepening Reform In Depth And Resisting External Shocks

The Political Bureau of the Central Committee of the Communist Party of China recently put forward the fortieth collective learning of safeguarding national financial security. It is a major task to manage the country's financial affairs and maintain financial security.

Recently, "one line and three meetings" has intensified the overall upgrading of financial supervision.

According to the insiders, we should further improve financial supervision, avoid regulatory gaps and regulatory overlap. We should guard against cross industry financial risks and cross market financial risks as key areas for maintaining financial stability, and focus on enriching and improving the toolbox for maintaining financial stability.

At the same time, we should improve financial supervision and deepen reform simultaneously.

"It is an indisputable fact that the risk of China's financial system has risen in recent years.

There are three main reasons for these financial risks.

Xu Gao, chief economist of Everbright Securities Management, pointed out: first, the real economic growth is facing difficulties.

Over the past few years, China's economic growth has gradually declined, making the entity business face challenges.

Correspondingly, the financial system is facing the pressure of declining asset quality and rising risk of bad debts.

Two, the contradiction between the rapid financial reform and the slow structural pformation of the real economy.

Financial reform such as interest rate marketization originally hopes to optimize the allocation of financial resources by relaxing control over financial prices. However, the pformation of real economy in China is lagging behind. There are still a large number of zombie enterprises and budget soft constraint financing main bodies that are not sensitive to interest rates, distorting the allocation of financial resources and giving birth to some financial chaos.

The three is the contradiction between the rapid development of financial formats and the relatively lagging financial regulatory structure.

Under the tide of mixed operation, China's traditional pattern of separate supervision has left room for regulatory arbitrage.

It is worth noting that financial innovation produces a large number of cross industry and cross market financial products. If there is a blank in supervision and the regulation standards are not uniform, it is easy to breed new risks.

According to the insiders, in order to maintain financial security and financial stability, cross trade and cross market financial risks should be taken as key areas to maintain financial stability, and efforts should be made to enrich and improve the toolbox for maintaining financial stability.

In Xu Gao's view, the real economy is in the process of alternation of new and old growth kinetic energy. At the same time, it is necessary to enrich financing methods to better meet diversified financing needs.

Financial reform has also exposed to a certain extent.

The arrears have exerted pressure on entity pformation.

If financial development stagnation, it is also not conducive to China's response to external financial shocks.

At the same time, financial supervision and deepening financial reform are complementary, not to strengthen the strict management, the financial business is not developed, but to further deepen financial reform through strengthening financial supervision.

In the long run,

We should go hand in hand with financial regulation.

Increasing market depth and resisting external shocks

Insiders pointed out that, from the 1997 Asian financial crisis to the 2008 international financial crisis, if it can not effectively prevent and mitigate financial risks, its impact on economic and social development is overall.

In the future, while emphasizing the role of Finance in promoting economic development, we need to guard against financial risks and maintain national financial security to a strategic level.

Hu Bin, deputy director of the Financial Research Institute of the Chinese Academy of Social Sciences, believes that first, we must concentrate our efforts on controlling and dealing with some risk points that have been exposed, such as risks caused by Internet Finance and some bond default.

Efforts should be made to prevent and control systemic risks so as not to affect the reform results.

The two is to prevent the throes of the downturn in the real economy from being pmitted to the financial system.

For how to resist future external shocks, Xu Gao said, China

We should keep pace with the international financial system and let the market have enough depth.

For example, he said: in the process of market trading, the standard of testing the depth of the market is that prices should not fluctuate excessively. If the market depth is not enough, small events will cause severe price fluctuations.

At the same time, the market depth depends on financial support. On the one hand, finance itself should develop to form a market scale.

On the other hand, we should straighten out the internal market operation system and let more rational investors dominate the market and play the role of market stability.

"Opening up to the outside world is unstoppable.

There are both opportunities and challenges. Therefore, we must do well in internal strength, increase the depth of the market and absorb external shocks through financial development and reform.

"Xu Gao said.

Arbitrage supervision should be combined with congestion

The system of "one line and three meetings" is dominated by separate supervision, but now financial markets are intersecting, and cross industry and cross market businesses are becoming more and more.

"If there is no unified regulation, there will be two tendencies, one is regulatory gaps, the other is that there is a dense overlap of regulation and some overlap," said Lian Ping, chief economist of Bank of communications.

Hu Bin believes that under the existing separation of industries, separate regulatory bodies should form joint efforts to prevent some systemic risks and risks arising from cross and cross fields.

Now the operation of some financial holding companies, especially the leverage operation, has affected the market, so we must plan the important infrastructure, including holding companies and financial holding companies.

Hu Bin pointed out that "in the future, we should form a co-ordination from the statistics of financial information and risk prevention and control.

The co-ordination body needs to be grasps, but there are currently no entity co-ordination bodies, such as the financial stability committee or the financial coordination committee.

In the future, we should further promote the establishment of an integrated coordinating body.

"

E Yongjian, chief financial analyst at Bank of communications Financial Research Center, predicts that the central bank will act as the lead coordinator in the future to further clarify the scope and content of regulation and policy coordination. The central bank will lead the formulation of more cross industry regulatory policies. The policy coordination between currency policy and macro Prudential supervision, macro prudential supervision and capital management, and "wrist supervision" will be carried out at a more systematic and specific level.

For the next step how to co-ordinate the supervision of arbitrage, Hu Bin said that financial innovation breeding regulatory arbitrage, regulatory arbitrage to promote financial innovation, innovation and then forced to strengthen the supervision of financial regulation, which is an interactive process.

In this process, regulatory rules and laws are lagging behind the market arbitrage.

On the one hand, we must crack down on the existing illegal arbitrage behavior; on the other hand, we should screen out some innovations in the market at present, especially the use of innovation, and further improve the rules to make up for loopholes in supervision.

Xu Gao suggested that, first, we have to open the main gate to block the back door. The arbitrage currently appears is constrained by the traditional financing.

Arbitrage behavior should be combined with obstruction.

The two is to further promote the mode of mixed supervision. In the future, we should strengthen coordination among different regulators, maintain efficient and smooth information, and share information of different regulators in real time.

Different regulators should be consistent in their objectives.

At the same time, there should be a mechanism to coordinate different regulators and respond in time.

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