In order to guide financial institutions to adjust the structure of foreign exchange assets and liabilities in a market-oriented way, the People's Bank of China and the State Administration of Foreign Exchange decided to reduce the macro-prudential adjustment parameter of cross-border financing of financial institutions from 1.25 to 1.
The central bank did not give further explanation for lowering the macro-prudential adjustment parameters of cross-border financing of financial institutions. However, considering the past actions of the central bank, lowering this parameter means tightening cross-border financing.
Precautions:
After the establishment of macro-prudential management mechanism of full-caliber cross-border financing with local currency integration, the central bank can adjust macro-prudential parameters to make the level of cross-border financing adapt to macroeconomic fever, overall solvency and balance of payments, so as to control leverage ratio and currency mismatch risk and implement countercyclical management of cross-border financing.
The settlement bank handling cross-border financing business for the pilot enterprises shall submit the financing information, account information and cross-border RMB revenue and expenditure information of the pilot enterprises to the RMB cross-border receipt and payment information management system of the People's Bank of China. All cross-border financing business data shall be kept until settlement for future reference, and the retention period shall be 5 years after the end of cross-border financing business.
After the pilot enterprises sign the cross-border financing contract and the pilot financial institutions submit the cross-border financing information by themselves, they can handle the relevant fund settlement for the borrowers according to the withdrawal and repayment arrangements, and submit the relevant settlement information to the relevant systems of the People's Bank of China and the State Administration of Foreign Exchange in accordance with regulations to complete the update of cross-border financing information.
The core of macro-prudential management is to take measures from macro and counter-cyclical perspectives to prevent the systemic risks caused by pro-cyclical fluctuations and cross-sectoral contagion in the financial system and maintain the stability of the monetary and financial system. As the core content of international financial management reform after the crisis, the international community has made positive progress in strengthening macro-prudential policies and initially formed an operable policy framework.
Macro-prudential adjustment parameters of cross-border financing directly affect the upper limit of risk-weighted balance that enterprises and financial institutions can raise abroad. The downward adjustment of financial institutions' parameters means that the upper limit of risk-weighted balance of cross-border financing of financial institutions has dropped. This move is conducive to controlling the cross-border financing risks of financial institutions in the current situation of increasing two-way exchange rate fluctuations.