2017 Annual Meeting Of China Development Forum: Watch Out For Excessive Financialization

At the "2017 Annual Meeting of China Development Forum", several experts said that China has seen signs and trends of excessive financialization. While increasing financial innovation to support the development of the real economy, we should also improve financial supervision, improve the regulatory system and strengthen regulatory coordination by complementing weaknesses. In addition, while increasing innovation, the banking industry should also establish an effective risk assessment mechanism, risk control mechanism, risk sharing mechanism, risk isolation mechanism and investment exit mechanism.

Chen Wenhui, vice chairman of the CIRC, said that China's financial industry currently has six major risks worth paying attention to: first, the risk of losing the real to the false; Second, the risk of financial industry deviating from the main business; Third, the risk of corporate governance failure; Fourth, the risk of radical operation; Fifthly, there is the risk of asset liability mismatch. Recently, some asset management products engage in capital pooling, which hides a great risk; The sixth is liquidity risk.

"Judging from the balance sheet of China's banking industry, these indicators are very healthy in terms of business scale, business quality, operating profit, provision coverage and capital adequacy ratio. Compared with the global banking industry, they are very good, and there is no basis for systematic and regional risks." Yi Huiman, chairman of ICBC, said that from the perspective of financial risks, We should pay attention to the problem of excessive financialization. From the national perspective, there are signs and trends of excessive financialization.

Yi Huiman pointed out that, Over financialization The tendency is mainly manifested in four aspects: first, the proportion of finance in GDP has increased rapidly; Second, there has been a phenomenon of rushing to finance in the society, and all kinds of new finance, quasi finance and quasi finance have sprung up everywhere; Third, some financial institutions have internal circulation, which leads to disequilibrium, especially the interbank, financial management, asset management and bills. There are too many leverage, too long chains and too complicated relationships, resulting in the deformity of the entire balance sheet; Fourth, some real enterprises unilaterally emphasize the combination of production capacity.

Chen Wenhui said that to effectively prevent and control the risks faced by the financial industry, there is a general requirement to strengthen and improve supervision. To prevent and control financial risks, the regulatory authorities are duty bound and bear the brunt of the burden. They should improve the regulatory system, strengthen regulatory coordination, enforce strict laws, and let regulators grow "tiger teeth". To truly take responsibility, offenders must pay a heavy price.

Wang Zhaoxing, Vice Chairman of the CBRC, said that in order to better support China in its innovation driven strategy Financial leverage In order to better play the role of banks, the CBRC has decided to select 10 banks in 5 provinces and regions for the pilot project of investment and loan linkage nationwide to link equity investment and bank loan financing.

"In this process, we also attach great importance to making banks not only increase support for innovation, but also better prevent possible financial risks." Wang Zhaoxing stressed that first, we should establish an effective risk assessment mechanism. There should be a scientific and effective assessment of the risks in the whole process of investment and loan linkage and innovation and entrepreneurship. Second, we should establish an effective risk control mechanism to effectively prevent possible risks. Third, we should establish a risk sharing mechanism risk , how to compensate and share losses. Fourth, establish a risk isolation mechanism to effectively isolate the failure of equity investment from the risks of banks' traditional business as investors and depositors. Finally, a more effective investment exit mechanism should be established to ensure the safety of banks in the whole process of supporting innovation, protect the safety of depositors and maintain the safety of the banking system.

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