Expanding The Investable Asset Market Is The Top Priority.

Recently, regulators have introduced some new initiatives. In fact, if we are concerned about the beginning of the second half of last year, the central government and the government have been paying special attention to our current systemic financial risks. Guarding against financial risks has become the focus of current economic and financial work.

From last year's central economic work conference to the government's work report at the beginning of this year and the recent political bureau meeting, including President Xi's speech, a very important policy signal conveyed is that the current financial risk has become a big problem. We need to think of various ways to prevent and control financial risks.

Objectively speaking, if we look at the development of domestic financial market in the past two or three years, we can feel that in real time, financial risks are heading and wandering in different fields.

In the early days, we saw the prosperity of the stock market and the subsequent decline. Later, we saw the fluctuation of the bond market, the rapid rise of the real estate market and the control measures of various local governments. Of course, we also saw the fluctuation of Internet finance.

Some changes in the market.

We also see that a relatively large pressure we encountered in the past year is the pressure of capital outflow and depreciation of the RMB exchange rate.

In my view, these risks are constantly emerging in different fields. In fact, they reflect a fundamental problem, that is, people are chasing good investment products, but such investment products are very limited.

This is a very big challenge we face today. We need to build a large scale, multi product and highly efficient asset market that can be invested in the asset market.

There is a basic macro mechanism behind these financial risks. In fact, there is a basic macro mechanism. On the one hand, there are many investment funds and there are not enough products to invest on the other. So the phenomenon is that as long as investors decide to concentrate in a certain market, the market will be prosperous and the price will rise, but at the same time the risk will accumulate, then there will be some problems and the regulatory authorities will be more nervous.

A fundamental problem behind this is that there is a lot of money, but the opportunity for investment is not so much.

Why do we have a lot of money? We have seen in the past that the savings rate of the Chinese people, including our Chinese economy, has been relatively high.

Many investors, including economists, used the most widely used index to analyze China's economy, which is the ratio of M2 to GDP.

There are many different interpretations of this ratio. China's ratio of M2 and GDP at the end of last year was about 208%, which is relatively high in the world. But the ratio is relatively high. There are several reasons behind it:

The first is that our financial system is mainly dominated by banks. The dominant feature of banks is that all financial pactions are embodied through deposits, loans and debts. Therefore, a bigger problem we face is that China has a relatively high leverage ratio compared with other countries.

The second important reason is that our savings rate in the past is relatively high, and the people have put a lot of money into the bank. In the end, it must be reflected that our M2 broad currency has a relatively high circulation and our leverage ratio is relatively high.

But I think the reason why this phenomenon is very important is that we lack a risk management mechanism in the past. We do not have a macro Prudential framework and no risk management mechanism.

So we see a very interesting phenomenon: when the economic situation is good, the money supply needs to be accelerated, so as to support the expansion of economic activities. When the economic situation is bad, monetary policy also needs to expand, because only in this way can we stabilize the economy and stabilize the financial market.

The final result is that we have formed an ultra-high proportion of M2 and GDP, which is reflected in the fact that the scale of the bank's deposits is very large in real life. This is not a problem for a period of time, but the potential risk is that when people want to take money out of the bank to invest, there will be a problem. Where is the money invested? Why is the risk of frequent occurrence in the past two or three years? One of the reasons is that more and more people want to invest their money out.

We can see an indicator in statistics, that is, the supply of narrow money exceeds the growth rate of broad money supply. In short, it is the short term of bank deposits. That is, people are no longer willing to accept the low interest payments in the past.

Therefore, the long-term challenge we face now is the high proportion of M2 and GDP. The short term challenge is that the growth rate of M1 exceeds the growth rate of M2, and deposits become short-term.

People do not want to hold more and more time deposits in the long run. Where should they invest their money? There are both positive and negative risks.

The positive opportunity is that the common people should take money to make investment, which is consistent with the formulation of "developing a multi-level capital market and raising the proportion of direct financing" in the third Plenary Session of the 18th CPC Central Committee.

Only when people take money to invest, can we directly raise the proportion of direct financing, so this should be a positive change.

However, negative changes may also be a risk. When such money is out, sometimes we do not know where the money will go, because we have few opportunities to invest, and the concentration of money into one place is prone to problems.

The simple popular saying in the past is, for the common people,

There are only about two places that can be placed, the first is bank deposits, because government guarantees are relatively safe, and the two is real estate. Apart from that, any market is not big enough.

This is a huge challenge I think we face today, and a bigger problem for our future wealth management market.

Of course, if the asset market is mainly from the bank to the future, that is, from indirect financing to direct financing, one of the obvious changes is that the risk bearing has changed.

In the past, we put money in the bank and take risks by banks. Banks basically provide guarantees to depositors directly or indirectly through the government or through the deposit insurance mechanism.

And if we want to invest in the future, investors will have to take risks themselves.

At this time, we can develop an investable asset market faster and more effectively, and make the wealth management industry develop faster. We need to do a lot of concrete work. I would like to make a brief list of four aspects today.

First, strengthen supervision.

At the end of the 90s, banks had a lot of bad debts, but in the end, the government made a clean sweep of it. In the future, I felt that it would be impossible for the government to continue to reveal all kinds of financial problems entirely. It is neither realistic nor conducive to market development.

We need to strengthen supervision and do a lot of work in improving supervision.

For the development of the asset market, the most important three aspects may be: the first is the coordination of regulatory policies; the second is the penetration of regulation. Now many of the more complex products on the market, not only investors do not understand, professionals do not even understand, and therefore need to have some penetrating management; third, marketization, can not be done by administrative means.

Second, risk pricing.

We have been pursuing the marketization of interest rates in the past, but in fact, the price difference between different products in our market is quite small, and even a lot of small and micro businesses can not borrow money. One of the reasons is that interest rates can not be raised enough to cover risks. In a nutshell, interest rates are not fully determined according to the market.

In fact, we see that in many private lending markets, including some Internet finance, small and micro businesses can actually borrow money. One of the reasons is that interest rates are really determined by marketization.

If interest rates can not be determined by marketization, the market is hard to develop.

Another important thing in risk pricing is to allow default, allow bankruptcy and allow problems.

If the risk point can not be released in the short term, the final result is moral hazard. Second, risk will continue to accumulate and finally accumulate into systemic risk.

Over the past few years, we seem to have been saying that some products have begun to default, moral hazard problems will decline, market interest rates will be strengthened, but now it seems that progress is still limited.

In the banking sector, we see that our deposit insurance system has been implemented for nearly two years, but at last we haven't seen the real problem and risk exposure.

This is because all financial institutions are running very well, or are we unwilling to release the risk? This issue deserves our attention.

The third is the thorough marketization of interest rates. The core of risk pricing is that asset prices should fully reflect risks. If your interest rate does not fully reflect risks, no one will be willing to participate in the market. Even if you participate in the market, there will be a lot of moral hazard accumulation. Interest rate marketization is crucial.

Fourth,

Education.

This work must be combined with risk pricing, interest rate liberalization and regulatory strengthening.

Finally, I think the wealth management we are talking about today is not just the wealth management of the traditional private banks in the past millions or tens of millions of dollars. It involves the future wealth management of hundreds of millions of Chinese people.

This will prompt the idea of financial institutions to change, and people will need to manage their finances, which means that the work of financial institutions needs to be changed.

In this field, I think we need to focus on the functions that Internet technology can play.

Many attempts in this field are just beginning.

The digital finance research center of Peking University has developed several Internet finance indexes in the past few years.

One of the indexes is the Internet financial development index of Peking University. Three interesting conclusions have been found: the first conclusion is that

It is growing at a rate of 100% per year.

The second conclusion is that regional differences are very obvious. Coastal areas are leading and inland areas are lagging behind, but in the past three or four years, this gap is narrowing.

The third conclusion is that young people are the main force to promote the development of Internet finance.

If Internet technology can be applied to wealth management, it will not only benefit those rich Chinese people, but also enable thousands of people who have not received good financial services from traditional financial institutions to enjoy high-quality wealth management services.

For more information, please pay attention to the world clothing shoes and hats and Internet cafes.