Abstract: Policy finance corresponds to commercial finance and is an important part of modern financial system. Following the share reform of state-owned commercial banks, the transformation of the three major policy banks has become another focus of domestic financial reform. This paper expounds the development course and present situation of the three major policy banks in China, and describes the reform ideas of policy banks as a whole. Finally, the reform ideas of policy banks are simply evaluated and suggested.
Keywords:: the status quo of policy bank reform
First, the development and present situation of China's three major policy banks
China's policy financial system was formed during the transition from planned economy to market economy. From 65438 to 0994, as an important measure of financial system reform, the state decided to establish China Development Bank, The Export-Import Bank of China and China Agricultural Development Bank. At the same time, separating the policy functions of the original four state-owned banks and cutting off the connection between the base currency and the policy business have created conditions for accelerating the commercialization of state-owned banks and establishing the independence of the central bank. As an independent financial system, policy finance was formally established in China. Since their establishment, the three policy banks have played an important role in implementing national industrial policies, supporting regional economic development, and promoting the sustained and stable development of the national economy. They have also played a positive role in the development of China's financial industry and the reform of its financial system.
China Development Bank was established on March 7, 1994. It is a policy bank with national key construction as the main investment and financing object, and handles loans and discount interest business for policy national key construction (including capital construction and technological transformation). In addition to the capital allocated by the government, the sources of funds of China Development Bank are mainly through the issuance of financial guarantee bonds and the subscription of financial bonds by financial institutions, in addition to some deposits absorbed by the People's Construction Bank of China.
China Agricultural Development Bank was established on June 5438+0994165438+1October 18. To undertake policy loans and act as an agent for the allocation and supervision of financial funds for supporting agriculture in the national grain, cotton and oil reserves, contract purchase of agricultural and sideline products and agricultural development. In addition to financial allocation, the main sources of funds are the issuance of financial bonds to financial institutions and the deposits of enterprises that use agricultural policy loans.
China Export-Import Credit Bank was established on July 6, 1994. As a policy bank implementing the national foreign trade policy, its main business is to provide buyer's credit and seller's credit for the import and export of large-scale mechanical and electrical equipment, and to provide credit discount and credit guarantee for the export of complete sets of mechanical and electrical products. Its sources of funds are mainly financial special funds and financial bonds, and its business activities are supervised by the board of supervisors composed of relevant departments.
After more than ten years of practice and exploration, China's policy banks have formed a management mechanism with China characteristics. While carrying out the government's intention and stimulating economic growth, we have strengthened management and made efforts to prevent and resolve financial risks. Many new situations and new features have emerged in management:
(a) major changes in business behavior
In order to meet the needs of the situation, policy banks have taken corresponding reform measures to further improve and strengthen the management system. Policy banks take the operating principle of "supporting economic development and preventing financial risks", and their awareness of preventing risks has been continuously enhanced, and their degree of independent decision-making has been greatly improved. At the same time, loan management, principal and interest recovery and risk prevention have been strengthened, and the management level has been further improved.
(2) The asset quality has been significantly improved.
In the course of operation, policy banks pay attention to preventing and resolving financial risks, choosing the best support object, establishing credit structure and credit restraint mechanism, and strengthening credit management. At the same time, through various means such as door-to-door collection, asset preservation and legal proceedings, the quality of credit assets has undergone gratifying changes, and the non-performing loan ratio has decreased year by year. By the end of 2006 1 quarter, CDB's total assets had reached 2.5185 billion yuan (equivalent to 31400 million US dollars), the non-performing loan ratio on the balance sheet was 0.82%, the provision coverage ratio was 288%, the capital was 50 billion yuan, and the capital adequacy ratio was about 9.1. By the end of 2004, the balance of off-balance-sheet and off-balance-sheet credit assets in The Export-Import Bank of China reached 275.43 billion yuan, with total assets reaching 305.87 billion yuan. The quality of credit assets was further improved. According to the five-level classification standard, the non-performing loan ratio of self-operated business was 5.28% at the end of the year, achieving the goal of "double decline" in absolute amount and ratio of non-performing loans for six consecutive years. By the end of 2005, the total assets of China Agricultural Development Bank were 850,265,438 million yuan, and the loan balance was 787,073 million yuan. According to the five-level classification standard of loans, the balance of non-performing loans at the end of the year was 79.86 billion yuan, a decrease of 45.82 billion yuan compared with the beginning of the year; The NPL ratio was 65,438+00.2%, down 7.3 percentage points from the beginning of the year. The balance and proportion of non-performing loans decreased, and the quality of loans continued to improve.
(3) The business scope and support fields are constantly adjusted.
In order to adapt to the changes of national macro-policy and industrial policy, policy banks actively adjust their business scope and support areas.
In 2005, the Agricultural Development Bank of China conscientiously implemented the policies of the Party and the state on agriculture, countryside and farmers and financial work, increased the credit support for agriculture, and the loan amount increased rapidly. Its main business includes: grain and oil credit business, cotton credit business and other reserve credit business. And actively expand new business. In 2005, with the approval of CBRC, China Agricultural Development Bank added national and local fertilizer reserves, local sugar reserves and local meat reserves. At present, in addition to the special grain, cotton and oil reserves, there are six categories and nine varieties of other reserve credit businesses. By the end of 2005, the balance of other reserve loans was 910.6 billion yuan, an increase of 88% over the previous year. The intermediary business of China Agricultural Development Bank has also developed rapidly, and the insurance agency business has been further expanded, covering all types of property insurance and life insurance.
From the establishment of 1994 to the end of 2005, 88.9% of the loans of China Development Bank were used to support industries such as electric power, highways, railways, petroleum and petrochemical, coal, posts and telecommunications, agriculture, forestry, hydropower and public infrastructure. In 2005, CDB continued to devote itself to the construction of China market; Increase support for social bottlenecks and ease financial pressure; Further vigorously promote the cooperation between asset management business and financial institutions; Continuously improve internal management capabilities; Actively promote international cooperation. Its intermediary business has also developed rapidly, mainly including financial consultancy, bond underwriting, securitization, high-tech venture capital and fund management.
In 2004, The Export-Import Bank of China's main businesses were: export credit business, including export buyer's credit and export seller's credit; Foreign preferential loan business; Lending business of foreign government loans; External guarantee business; International and domestic settlement business. Greatly promoted the development of China's import and export. Its intermediary business has developed rapidly. In September, 2004, China Banking Regulatory Commission approved the Export-Import Bank to carry out derivatives trading business, becoming the first policy bank to obtain this authorization.
Second, the reform ideas of policy banks in China
At the beginning of this year, the annual working meeting of the central bank decided to formulate and implement the policy bank reform plan step by step in accordance with the principle of "one line, one policy". At the same time, the working meeting of the CBRC at the beginning of the year clearly stated that "accelerating the reform of policy banks" should be the main content of the reform of financial institutions this year. This year's "two sessions" wrote "promoting the reform of policy banks" into the "Government Work Report" for the first time. The reform of policy banks has become another hot spot after the shareholding system reform of state-owned commercial banks. Based on the reports of various news media and the comments of senior national financial officials on the reform of policy banks, we can generally see the reform ideas of policy banks in China this year:
Repositioning: One Line, One Policy
The preliminary design of the reform plans of the three policy banks was completed by the personnel of the Research Bureau of the Central Bank under the personal command of Governor Zhou Xiaochuan. Correct the traditional understanding of policy makers and insiders on the functional orientation of policy banks: that is, conduct business according to the instructions of the state, and make up the losses by the state. All three policy banks are defined as state-owned financial institutions with development functions, directly under the State Council, with the aim of implementing national industrial policies. This functional orientation means that the business scope of the three policy banks, especially the Agricultural Development Bank and the Export-Import Bank, will be greatly relaxed.
(2) Separate account management: national account and bank account.
In the aspect of separate account management, the opinions of the central bank and the CBRC are relatively unified, that is, separate account management is adopted. The so-called separate account management refers to dividing the business of policy banks into two categories, one is the business designated by the government, the other is the market-oriented business or the bank's self-operated business; At the same time, two accounts are set up in policy banks, one is a national account, which specializes in policy business; One is a bank account, which co-ordinates all businesses permitted by the Commercial Banking Law and does not enjoy preferential policies. These two businesses are accounted for separately. In the case of separate account management, the state finance only compensates the losses in the state account and is irresponsible for the operation of the bank's self-operated business.
(3) Supplementary capital.
The three policy banks generally have the problem of low owner's equity ratio and capital adequacy ratio. Therefore, the new plan includes enriching capital through multiple channels and establishing a long-term and sustainable capital replenishment mechanism. According to the current situation in China, due to the "pure state-owned bloodline" unchanged, the supplementary channels of capital can only be composed of financial capital injection, Huijin company capital injection and bond issuance in domestic and foreign markets. Among the three policy banks, China Development Bank has issued a large number of loans with maturities of 10 and more than 20 years. So it takes a long time to expose the risk. From now on, the non-performing rate of its assets is only about 2%, which is better than many domestic first-class commercial banks. However, both the Agricultural Development Bank and the Export-Import Bank are facing the same problem, that is, how to deal with non-performing loans on their balance sheets. The scale of non-performing loans of the Export-Import Bank is estimated to be within10 billion yuan. The total amount of non-performing loans caused by institutional and policy reasons in the Agricultural Development Bank is definitely much higher. The huge loan losses caused by the breach of contract by state-owned grain buying and selling enterprises can also be solved by negotiating with local governments, using debt-to-equity swaps, using real estate property rights of grain buying and selling enterprises to offset shares, and so on. Once the disposal method of non-performing assets is determined, the planned completion period should be determined according to the difficulty of handling the amount, such as 2 years, 3 years, 5 years, etc. There is a logical premise in the design of the disposal method of non-performing assets, that is, the central finance, as a policy bank directly under the State Council, should recognize the pure policy losses caused by mandatory tasks and the purpose of stability and unity, and give corresponding solutions; However, the loan losses caused by poor management of policy banks should be offset by transferring future operating profits into provisions.
Third, a simple evaluation and suggestion on the reform of China's policy banks.
First of all, accurately locate the three domestic policy banks. As a financial tool to realize the national economic development strategy with the help of national credit, policy banks are non-profit financial institutions that conduct market-oriented operations but do not aim at maximizing profits. National credit support, market-oriented operation and non-profit should be three remarkable characteristics of policy banks in the new period. First of all, policy banks need national credit support. This is because policy banks serve the national development strategy, and the use of national credit can win funds in the international market at a fairly low cost, which is conducive to the development of their policy business; Secondly, the implementation of market-oriented operation can avoid the inefficient operation of policy banks due to excessive dependence on finance, and make up for the institutional defects and market risks of policy business by market-oriented methods, thus enhancing their ability to cope with concentrated, large and long-term risks, which is also the biggest difference between new policy banks and traditional policy banks; Third, the management goal of policy banks is not to maximize profits, but to serve the national development strategy and maximize national interests. On the above basis, the principle of "one line, one policy" fully considers China's current economic development situation and development strategy, which can better adjust the business scope of existing policy banks and give full play to the supporting role of policy finance in the national economic development strategy.
Secondly, under the premise of clear positioning, legislation should be made for the three policy banks as soon as possible. Because there are great differences between policy banks and commercial banks in business objectives and business scope, most countries legislate on policy banks separately. At present, only the State Council (1994) No.22 document is used as the basis of policy banks in China, and the specific content is no longer in line with the development requirements. Therefore, special laws and regulations should be promulgated as soon as possible to regulate the operation behavior of policy banks. In view of the diverse business types and inconsistent institutional characteristics of policy financial institutions, it is advisable to use the same law to regulate and legislate separately according to the different characteristics of banks. Through legislation, we can further clarify the nature, status, business scope, business purpose, source and use of funds, accounting system, financing method, profit treatment method and supervision system of various policy banks as national trust institutions, and promote self-restraint, independent decision-making and healthy development of policy banks. Adjust the business scope, separate policy financial business from commercial financial business through the system, and strengthen the self-construction of institutions.
Third, an isolation mechanism must be established between the two accounts. Dividing national accounts and bank accounts is a common practice of most policy financial institutions in the world. Policy finance represents the interests of the public or quasi-public, and needs to obey the specific industrial policy, social policy or strategic intention of the country. In addition, with the expansion of market-oriented sources of funds and financing, policy financial institutions in many countries are also carrying out reforms and engaging in commercial investment business within a certain range, but the commercial business is limited. Separate account management helps to reflect the national policy orientation and government intention, and at the same time enables major policy banks to make independent decisions, take risks and be responsible for their own profits and losses, firmly establish the concept of cost-effectiveness and realize sustainable development. However, an isolation mechanism must be set up between the two accounts to prevent the loss of commercial accounts from being transferred to the national finance, which is also the first issue to be considered in establishing a separate account management system.
Finally, the governance structure and internal operation mechanism reform. Once the positioning of the three policy banks is accurate, the governance structures of these three banks should be adjusted accordingly with reference to the modern corporate governance structure. In addition to establishing the board of directors, the board of supervisors or introducing the independent director system, its senior management should also design corresponding mechanisms according to the principal-agent relationship, and think about some issues accordingly, such as whether the chairman and the president are separated or whether one person concurrently holds the post; The vice president is nominated by the chairman and president or directly appointed by the superior organization department; Whether the salary level of the management team can be linked to the performance accordingly; How to design the accountability system of management and so on.
References:
[1] the transformation and development direction of policy banks in China: Fan Shen, theoretical construction,No. 1, 2006.
[2] Where will the policy banks go? Zhao Jiangshan Economic Information Daily, May 9, 2006.
[3] Three major policy banks turned to financial Huijin for joint capital injection: Wu Yushan, 2 1 Century Business Herald, May 6, 2006.
[4] Under the personal command of Zhou Xiaochuan, the reform of three policy banks began this year: Li Weiling, International Finance News, February 27, 2006.
[5] Summary of the International Symposium on Reform and Transformation of Policy Banks: April 28, 2006
[6] Data source: websites of three policy banks and their annual reports.