Measures to clean up foreign non-performing assets;
Due to the differences in the causes, asset status and economic environment of non-performing assets in different countries, the disposal methods (including loss-bearing methods) and emphasis of non-performing assets in different countries are also different. However, in the specific operation process, the main measures and methods to dispose of non-performing assets generally include the following:
1. Strengthen the bad debt reserve system, write off bad debts and optimize assets. For example, the United States increased the loan loss reserves by 20%, 50% and 100% respectively for different non-performing assets (the last three categories in the five-level loan classification), and explicitly and strictly stipulated that the loss reserves should be written off to loss accounts, prompting banks to solve non-performing assets as soon as possible. Singapore, South Korea, India and Indonesia all have high bad debt reserves, and some can even add them at any time.
2. Separate non-performing assets and hand them over to specialized agencies. After a comprehensive clean-up of non-performing assets, the non-performing assets of banks will be stripped out and handed over to specialized institutions for operation. The United States, Sweden and Japan have all done this.
3. Cultivate intermediary institutions and intermediary experts for asset restructuring. Cultivate qualified intermediaries that meet the requirements of market economy and have rich experience in capital operation, and establish a market-oriented corporate governance structure and a reasonable supervision and incentive mechanism within them to prevent unreasonable intervention by administrative factors in market-oriented asset restructuring; Train professional managers, select outstanding elements from private sector professionals and bankers to deal with non-performing assets, and prohibit government officials from serving as managers of major enterprises.
4. Make full use of the financial market, especially the securities market, sell bank assets at a discount or partially securitize them, and reduce the scale of non-performing assets. After the occurrence of non-performing assets, they are directly discounted and sold to high-quality banks for refined management. Although it will bear a certain loss of interest, it can preserve most of the assets and resolve or transfer the loan risk.
5. All or part of the creditor's rights are converted into equity. As early as 1929 financial crisis, stock market crash and economic depression, in order to prevent enterprises from repaying bank loans, Italy once converted the loans that enterprises could not repay into bank-to-business equity. Later, the Italian government set up Ilya Holding Company, which bought the shares of enterprises held by banks, reorganized these enterprises and sold them to private individuals after the reorganization was successful.
6. Direct capital injection. Capital injection includes government capital injection and private investor capital injection. In fact, in addition to direct capital injection by the government, encouraging bank mergers is also a way to inject capital. This method has been used in Korea, Indonesia, India and China.
7. Bankruptcy liquidation. Bankruptcy liquidation is the final form to solve non-performing assets. For insolvent and hopeless enterprises, bankruptcy is adopted to pay off debts.
8. Use credit asset derivatives to reduce risks. For example, default options on credit assets, financial interest swaps and bonds related to credit assets are adopted to reduce the credit risk of specific projects. In recent years, the credit asset derivatives transactions of western commercial banks have developed rapidly, and the transaction volume in this business field in the United States 1997 is about 80 billion US dollars. But this way is not so much a way to dispose of non-performing assets as a way for commercial banks to avoid and prevent non-performing assets in advance.