New Youth. Tradeoff, which guarantee the safety of the system closed to the outside and the internal structure of monopoly was broken, from the edge of the walk on the crisis.
section at this time, deep-rooted system of the financial system risk, full scan, will no doubt help response to endanger people's lives.
financial risk, the scale is tantamount to financial internal risk, including more than several trillion trillion deficit where the pension gap. They are the number one threat to the Chinese economy, Chinese Finance and financial situation, regardless of family, the financial risk may quickly turn into financial crisis.
the root of China's financial crisis, what is? China, far away from the financial crisis? This publication attempts to answer the question. Professor Chen Zhiwu straight refers to the legal environment, press freedom and the state-owned financial institutions, can be described as profound and accurate. If these can not be fundamentally improved, China's experience with the financial crisis is inevitable.
the editorial department and one of five financial experts for you detailed anatomy of China's financial.
how far the financial crisis in China from the Cen families could be so similar
editorial
2001 by the end of the recession and Argentina's deteriorating financial situation, financial markets panic, the occurrence of capital flight and bank run events. The Government then released a limited withdrawals and residents limit the outflow of funds policy. but further aggravated the panic set off a long-standing social conflicts poised, leading to large-scale riots across the country, demonstrations and bloodshed. Argentina than ten days, three presidents replaced, the whole society into economic deterioration, political chaos and instability.
forward and back, in 1998, the Russian debt default triggered the financial turmoil affecting spread to distant Brazil; 1997, Thailand, Indonesia, Korea and other Asian countries, the outbreak of the financial crisis; 1994 1995, hurricane swept through the financial crisis, Venezuela, Brazil and Mexico. in the development of economic globalization today, war, floods, disease and other disasters, being the traditional more control, and the financial crisis still threatens our life.
modern media disaster for the financial crisis vividly to life in front of the Chinese people: In Mexico, middle-class depositors to withdraw their life savings in vain to beat the door of the bank; in Indonesia, shopkeepers in the streets of Jakarta riots in the hard to save his business; in South Korea and Japan, dedicated staff is the threat of unemployment pressure doubled up, heard the news about suicide; in Argentina, hungry people forced to the streets of dead bodies, dead horse eat??
all of these, it seems very far away from the Chinese people, it seems very close. The financial crisis, economists are often contrary to expectations. and similar economic development environment in East Asia, Southeast Asia, in 1997 before the crisis, has enjoyed rapid economic growth since the Recalling the experience of other countries experiences and lessons of the financial crisis, the crisis may view their own experiences and risks, especially important for China.
the World Bank report, the financial crisis is defined as significant losses or even eliminate the financial events. difficulties; the second is liquidity crunch as banks, other sectors of production and business activities have a ripple effect, leading to recession and decline in the real economy.
, the bank is part of the prevailing system of m that the reserve bank deposits, most of the loan, leaving only a small part of the extract for the depositors. the mechanism for enterprises to large-scale investment and economic development possible, but also for the financial panic create the conditions for self-realization. In theory, whenever and wherever the same time the depositor withdrawals, the bank will be closed down.
but the run will not happen for no reason. In general, depositors can not simultaneously withdrawals from banks, which is part of the reserve system to be implemented in the cause. in exceptional circumstances, savers worried about the safety of their deposits are not guaranteed, and in some major events or news stimulation, panic, racing to the bank provided section, it will cause a financial crisis. Therefore, we must examine, in other country's financial crisis, what factors increased the potential depositors run on banks the possibility of which factors reduce the ability of banks to withstand a run.
by 20th century, 90 emerging market countries since the outbreak of several major financial crisis, review, can be found almost every outbreak of the crisis has its own characteristics and causes of the factors in the complex also contains a lot in common. But clearly, we are more concerned about is that in all these factors, the current situation in China which are similar?
capital markets are underdeveloped, the risk to the bank concentrated
80s of last century, the emerging market countries to open the door to overseas investors, to attract foreign investment, culminating 90 years. But in these countries, the financial system, dominated by banks, rather than the stock market and bond market. In the U.S., banks are only required to provide the private sector 25% of external funding, the rest by the stock market and bond market. And in Asia, Eastern Europe, Africa and South America market, the ratio is usually reversed in the. Capital markets in these countries reached a shocking lack of the point.
the stability of the financial system, the banks are inherently risky. I said before, in the modern economy, the Bank reserves the prevailing system of m is part of the bank deposits, most of the loan, leaving only a small part of the extract for the depositors. the mechanism for the financial panic and create the conditions for self-realization. In theory, whenever and wherever the same time the depositor withdrawals, the bank will close down 1931 in the United States the Great Depression, almost half of U.S. bank failures, most of them operate in good condition m banks m the reason why.
China's stock market, beginning in the establishment of institutional bias and the presence of functional defects, which lead to poor quality of listed companies and the stock market is the slow development. For example in 2003, the size of new loans in the banking system is about 3 trillion yuan, accounting for 85% of the total financing, while the same stocks, bonds, corporate bonds, the new direct financing increased scale of 534 billion yuan, accounting for 15% of the total financing, which it adopted the form of stocks and corporate debt financing of less than 5%. shows that the structure of financial markets, a serious imbalance in the financing, risks are concentrated in the bank. This point financial crises in emerging market countries are very similar, even more pronounced.
distort the banking system, banks have a lot of bad conditions in the financial crisis
formation and the impact on the real economy bear the brunt. Government intervention in the banks, often leads to blind bank loans, and bank together with the company's over-bite, as well as banks and companies reduced ability to withstand the financial crisis. This financial crisis in Korea was most typical of the time.
90s of last century, South Korea Kim Young-sam government vigorously promote industrial policy, government-led financial institutions, with the chaebol, the bank closely, using a variety of means to support large enterprise groups, leading to the double twist of enterprises and banks.
Korean government provides: private and private institutions may not have a separate bank 4% of the shares; all bank president, the manager must be appointed by the government; banks the financial and personnel matters are firmly in control in the hands of officials and the chaebol loans on the whereabouts of behind the scenes. The Government not only control the flow of credit and interest rates, and also control the duration and type of loans. Bank as a financial sector under the Government, virtually no independent review of the credit risk of the ability and authority.
that produced a large number of directed lending to create the conditions for bad debts. due Korea The Government has long been big business and banks to achieve preferential protection measures, the financial supervision institutions do not play a role in the review is not strict, which causes excessive borrowing. For example, in 1996, South Korea, the amount of liability of listed companies increased by 20.3% over 1995, the overall asset-liability ratio reached 84.1%. At the same time, most of the South Korean capital of inefficient enterprises. In the first fifteen years of crisis, only four years before companies can afford the cost of debt, the entire national economy, only two sectors in the electronics and steel to create value . As a result, banks have a lot of bad and doubtful debts, 11 major banks in the amount of bad debt rate of 14.3% of total loans, of which the majority of bad debts of large enterprises.
in the normal market economy, if companies can not make a timely return loans, financial crisis, banks will soon be informed of the information, and timely manner. But in South Korea, the government's industrial policy to this very important information under the carpet. As large enterprises the lifeblood of the national economy and infrastructure, once the bankruptcy is bound to cause social turmoil. coupled with the enterprises, banks and government officials in the interests of the complex relationship between, making the South Korean government desperately cover up the truth of bad loans, can drag on drag.
South Korea's large enterprises in order to reverse the plight of further investment in Those earnings are high but the risk of large projects. Bank knew of these projects is very risky, but if you do not support these projects, companies can never repay the loan. so banks had to be business led by the nose, the banking system's bad debt hole is also growing. This kind of industrial policy and banking business under the guidance of the double twist, sowed the seeds of the financial crisis.
bad loans of China's financial system, the generation of exactly the same with South Korea. bad debts after the election, the Government bad debts and the treatment of people is abysmal. In 1999, China's financial sector unique much to recover? not recover bad debt how to do? future bad debts arising from the way it should eliminate by stripping? are the big questions.
excessive government expenditure, external debt in the past few
financial crisis, the huge external debt burden is a common feature. countries before the crisis, there is a constant, the formation of large amounts of external debt. For example, before the Asian financial crisis, the dollar value of less than 1 year foreign bank debt, accounting for 45% of GDP in Thailand, Indonesia and South Korea 35% of GDP GDP, 25%.
debt problems of Latin American countries, more is known. of Argentina, for example, the end of military dictatorship since 1983, restoring After democracy, has repeatedly promote privatization and economic reforms, but the problem of excessive government spending has not been resolved.
problem in Argentina, political elections, political parties have promised to win votes, such as improving social welfare to improve the salaries of civil servants and increase job opportunities, and so on. but need money to improve social welfare, increasing job opportunities means that the government increase employees m1991 to 1999, only the capital of Buenos Liss, government workers increased from 280,000 to the results of 40 million m straight up government spending and the deficit the year 1999, the Argentine government spending to GDP, 28.2% of GDP in 2001, an estimated 1 / 3.
1991 years ago, the Argentine government to deal with fiscal deficits is internal printing money. In the future, to make up deficits, the Government can only borrow from abroad. But, worried that Argentina's ability to repay a large number of foreign financial institutions in lending loans, unwilling to continue lending .2001 December, the Argentine government penniless , announced a freeze on repayment of principal and interest, the financial crisis broke out.
For China, the external debt burden and fiscal deficits have not yet become a matter of concern. However, expansion of government spending, civil service wages rising trend is increasing. particularly central financial situation is excellent, cover local government debt and the implicit government debt (such as social security fund gap) problem, it should cause alarm. Once the government focus on the outbreak of the debt problem, in addition to printing money to inflation the way, Account important reasons. Intuitively, it is. For example, in 1996, and later the financial crisis Asian countries received a total of 5 478 billion in foreign bank loans, and after the 1997 crisis, the inflow of funds into a 299 billion outflow of funds, into a difference of about 780 billion U.S. dollars, imagine the impact of the financial system.
but further look, generally attributed to the financial crisis and the free flow of capital is meaningless. As banks withdrawal must be guaranteed freedom of depositors, but all at the same time as withdrawal will lead to bank failures; the event of a bank run, we should look for reasons for a run, rather than question the withdrawal of bank failures as the basis for freedom. < br> In general, for developing countries, to forward the process of financial market is facing three problems: First, the domestic financial market development and regulation; the second is open to foreign investment capital account; third the price of money (exchange rate) of free float. these three aspects of the reforms, if the order properly, will increase the risk of financial crisis.
Thailand is a typical example. Thailand's financial reforms began in the 80s. to 1991, Thailand's financial liberalization accelerate the reform, the basic realization of capital account liberalization. But at the time, Thailand's financial markets, often from the reasonable use of review and oversight.
the other hand, while allowing the free flow of capital, and without relinquishing exchange rate controls in Thailand. It is the introduction of a government intervention in the market under the fixed exchange rate system, in which the central bank through the sale of foreign exchange, foreign exchange supply and demand adjust to maintain the exchange rate unchanged. this system is the generation of the bubble economy created the conditions.
At that time, large foreign capital inflows in Thailand in order to maintain the exchange rate unchanged, the Thai government to increase the supply of baht, with the Thai baht such as the yen or U.S. dollars to buy foreign exchange. As a result, the increase in the baht through the banking system, into the real estate and stock markets .1993 to 1996, Thailand's foreign exchange reserves from 250 billion dollars to 40 billion U.S. dollars; housing loans increased to 470 billion baht from 790 billion baht; real estate prices rose by nearly 400%, it is a reflection of this situation.
Thai authorities have tried to stop the economic bubble. when they buy foreign exchange, increased baht supply, and then through the sale of bonds to buy back the same amount of Thai baht, the so-called influx of more foreign investment, economic bubble continue to expand until the final burst, triggering the financial crisis.
now see the lessons of Thailand, it should be in the financial opening-up, first complete the construction of domestic financial markets and supervision; at least in While opening the capital account, to abandon the fixed exchange rate. But this lesson has not been sufficient attention. Even today, China's financial reform is still in the open market to go first, while easing the flow of capital account, but stick to the road of constant exchange rates . the prospect of this road has been written in the story of Thailand's financial crisis.
examine the Chinese economy, the plight of the real estate bubble and the policy control has been looming on the horizon. able to avoid the arrival of the financial crisis, it is the Chinese economy and economic scholars severe test managers.
bank three trillion of bad debts the non-performing loans this agency's data, the first quarter of 2006, banks with total assets of 39.1927 trillion yuan, the insurance industry's total assets as of May 2006 was 1.6822 trillion yuan, the stock market in May 2006 the volume was 1.0727 trillion yuan. The insurance industry and the stock market sum equivalent to the size of the bank only 1 / 15 or so, and even lost to the number of bad bank loans.
non-performing loans Know?
China's banking industry generated total non-performing loans in the end how much, the official has not been standardized information disclosure. Sanfanliangci through the government's First quarter statistics, the country's balance of NPLs is 1.31247 trillion yuan, non-performing loan ratio 8.03%, 1.0588 trillion yuan of state-owned commercial banks, the ratio was 9.78%. but it is has been packaged, after stripping the data. We to know the real number of non-performing loans, it must be stripped to the four asset management companies part is counted, although they are not in the bank's balance sheet reflected, but the bank's liabilities to the depositors relationship is still there, it still belongs to the bank bad debts. all these years the total amount of bad loans banks gradually stripping, there is no reliable official data. the author of the bad loans since 1999, data were stripped following incomplete:
1999 years, the stripping 1.3939 trillion yuan of bad assets, of which four state-owned commercial banks to divest non-performing loans of about 1 trillion yuan;
2004 年 5 months, the Construction Bank, the second stripping non-performing loans 56.9 billion;
2004 年 6 months, stripping 128.9 billion yuan CCB doubtful again loans;
2004 年 6 months, the Bank of China listed on the eve of stripping the 149.8 billion yuan of bad debts;
2005 年 5 months, the bank handling non-performing loans 705 billion yuan. of which 459 billion yuan a direct spin off its asset management companies, 2470 billion in the bank was placed under the Ministry of Finance and co-management fund account, and entrusted to dispose of Huarong Asset Management Corporation.
sum based on the above statistics, a total of 2.4375 trillion yuan of bad loans stripped, not including the spin-off does not collect information and policy banks, the amount of other non-performing loans. net at the four asset management companies in the first quarter total assets of 209.65 billion yuan recovered from asset management companies managing the actual bad debts incurred by the banks by a total of 2.27785 trillion yuan.
this figure does not fully and non-performing loans within the banking system, adding the total amount of NPLs in China no less than 3.59032 trillion yuan. It is estimated that non-performing loans of Chinese banks may be up to 50,000 billion dollars. This is about the total size of China's insurance and securities markets of the two times.
disposal of bad loans hidden dangers like a huge non-performing loans to the banking system in the buried time bomb, if not properly handled, it could explode at any time.
generally for non-performing loans are written off, peel and the injection of three ways. offset the profits of the banks with their bad debt write-off, if profit is not enough, you need to use the capital to offset. Although China's giant state-owned banks, but really pitifully low profit margins. count on profits and equity capital gold to write off bad loans is unlikely to resolve, but not on the state-owned banks is not a business, not thought of bad loans written off with the profits.
non-performing loans by the state to solve the problem, and have become the only option under the existing conditions . Yet it is the state-owned property, as banks and bad loans will be endless. Now for the government to deal with bad loans, on the one hand can not cut off the bad roots, doomed to failure, on the other hand some operating practices against the laws of the market, itself hidden dangers .
stripped of bad bank loans, is the invention. four asset management companies dedicated to the transfer of bank bad debts. but that only makes the bank and the banks are the country's > state-owned banks are state-owned enterprises, in theory, the state as shareholder, the enterprise should pay for losses or bad debts. the State may legally use the funds revenue. China had issued 270 billion yuan in 1998 to enrich the state-owned banks in special bonds capital. However, this method is not sustainable, the bank's bad debt amount is too large, the Government can not afford one. Also in the country needs a helping hand to solve the national financial , pension gap of several trillion. national finance came forward only inadequacy, unable to cope.
can only make the government so the idea of foreign exchange .2005, the state established a In June the Bank of China and China Construction Bank to inject 45 billion U.S. dollars. This is the state-owned banks, bad debts is tantamount to printing money, causing inflation. In addition this will also greatly affected people's confidence in banks, induced bank run.
order to solve the bad debt crisis, the government described as the best tactic. bad dissection, the financial injection, foreign exchange injection, these measures do not eradicate the root causes of non-performing loans: the state-owned banks and state-owned enterprises and government projects related. as long as the bank also must follow the instructions for the government loans to state-owned enterprises, as ; loans, bad loans at a reasonable range that is nonsense. do not start from the root, but to the bank with a steady stream of
do not have the heart to control? care of a supervisor it would be to spend money. state-owned banks listed overseas, probably because of this logic is .2005 October, China Construction Bank listing, Bank of America and Temasek, a subsidiary of Asia Financial Holdings Pte Ltd, China Construction Bank were holding 9.0% and 5.1% of the shares listed on the line .2006 6 months, accounting for 15.46% foreign equity, which holds 9.18% of Royal Bank of Scotland; Temasek holds a 4.59%; Switzerland Bank of China Group holds a 1.47%; the Asian Development Bank, accounted for 0.22%. ICBC will complete the listing, foreign investors also share 20% equity.
carefully packaged, the sale of shares of state-owned banks, suffered multiple queries . Let us put aside off-called strategic investors do not care about improving the governance of banks is still more than 85% state share holding of absolute power, but also arbitrary use of bank funds for the state to leave the space. Bank of listing, the coexistence of the Party Committee and the Board, such as Guo Shuqing is also the chairman of China Construction Bank is the bank's party secretary. This governance structure has obvious Chinese characteristics. listing of the bank, still state-appointed senior management to improve the situation of non-performing loans, little hope.
non-performing loans ratio is about 20% of loans (including the part has been stripped), the reason why no outbreak of the crisis, because people no choice but to put money into the state-owned banks, China's people but also especially like to save money. Once these conditions have changed non-performing loans do not cover the high deposit gap, the bank not far from the crisis. It may also be delays in China causes gate opening to private banks.
2006 年 11 months, the full liberalization of China's external financial industry, foreign bank to its private bank in China to obtain in China carry out a comprehensive financial business qualification. the people to save money, has the more attractive option. China is a serious imbalance in savings, , or 8% have 80% of bank deposits. This is 8% of the depositors live in the leading cities in the domestic economy, the ability and knowledge to judge the performance of banks, and an open international perspective, less the deposit on a ism Select the first foreign bank. Chinese state-owned banking services is poor, cumbersome, low value-added, many people will therefore turn to foreign banks. journal editors, financial experts Professor Xu Dianqing estimates, if 10% of the funds to switch foreign banks, Bank of China's crisis will be revealed.
savings rate in China is also reduced. Xu Dianqing %, hovering around, as China's economy growth and the formation of a new generation of consumer groups, China's high savings rate in 2012 and 2015 disappeared.
the one hand, savings rate, not so love the people saved the money; other the one hand, place deposits with more choice. saving fall, water falls to a certain extent, the huge state-owned bank deposit gap no longer exists, the operation of state-owned banks will face bankruptcy.
then we can open to bears because of the crisis, it will be protected in a closed state-owned banks in it infancy ? Facts have proved that a closed financial system can not guarantee the safety of banks. Despite the national credit guarantee, but the volume of bad debts continue to roll, one day an avalanche, the state only to acceptance by depositor withdrawals of hyperinflation, when the countries to maintain reputation is also difficult. the Asian financial crisis, the situation in neighboring countries is a vivid example.
We can only hope that reasonable business rules and requirements of the banking industry, We not only welcome foreign banks, we also called for the establishment of private banks, more than a force hopes to improve China's banking system and establish a sufficiently robust financial market.
Xu Dianqing: RCC more than twenty thousand incorrigible New Youth. tradeoff, only the more serious the more shouting
professor at the University of Western Ontario, Xu Dianqing
bad assets of financial reform in rural areas the most headaches.
according to central bank survey, many non-performing loans of rural credit cooperatives around 50% Some non-performing loans of rural credit cooperatives or even 80% or more. the country carrying non-performing loans of rural credit cooperatives in 2004, more than 5,000 billion yuan. huge non-performing loans will be overwhelmed rural credit cooperatives, most of the rural credit cooperatives paralyzed or semi-paralyzed.
after the introduction of rural credit cooperatives reform program, the provinces will participate in the reform is very high. The most important reason is the hope to get a sum of money from the central bank to make up the hands of non-performing loans of rural credit cooperatives. Bank painstakingly designed a way to try to serious non-performing loans from rural credit cooperatives freed. central bank notes issued before 2002 to take half of the non-performing assets of rural credit cooperatives, rural credit cooperatives involved in the reform commitment to yourself to digest the remaining non-performing assets, increase their investment in the capital adequacy ratio reached 2% only after the notes convertible into cash. In other words, half of the central bank will write off the bad assets of rural credit cooperatives. the central bank to spend large sums of money come from several thousand billion ? There is no doubt that any money out of heaven, but to point quietly to print money out. Ultimately, the funds saved by all the people of rural credit cooperatives to share the.
Some people say, spend money on mechanism. If you can make from farming information society on the right path, even though still worth a little more money. The key problem is that money can not buy mechanism? reservations on this point more and more people.
performance of RCC reform program distinctive mark out the planned economy: government officials all play a leading role in formulating a set of measures from top to bottom, a fund for rural credit cooperatives, rural credit cooperatives leadership change ownership. when the original founder of the rural credit cooperatives, followed Leadership is the will, and now has embarked on a reform program unknowingly old.
According to this idea to guide the reform of rural credit cooperatives, it is possible that the situation: set up the state money, the people's money down the ring. it seems as long as the money can solve the problem of rural credit cooperatives. do not know if I have thought about the question: who is going to rely on rural credit cooperatives reform program implemented? idea if we can in accordance with the plan to transform the economy of rural credit cooperatives, then long should pick up. the problem of rural credit cooperatives in mid-call, how to call the more the more serious?
among the country's rural credit cooperatives, one-third is good. For these good or relatively good rural credit cooperatives , we should actively encourage their growth and development, which conditions shall have let them into the formal banking. However, there are more than 20,000 credit unions are not the fundamental transformation. planned economy is not the biggest mistakes people Zhuomo Tou . A man of words, slogans, from the surface, it seems perfect, but in practice simply does not work. whether it is the rural credit cooperatives and the Associated Press into the county, or allow them to change the composition of the rural commercial banks, people are still the original people, institutions or the original system, so how can fundamental change? tinkering, to no avail. For those who do not meet the basic requirements of financial institutions, rural credit cooperatives, the only way out is for them to exit the financial sector step by step . only the metabolism in order to ensure the healthy development of species. banking as well. only through fair competition, survival of the fittest, in order for rural financial institutions with the competitiveness of the agricultural services. regardless of good or bad, preserving all the rural credit cooperatives are down, does not meet the philosophical dialectics, the theory is untenable.
been said, an opportunity to rural credit cooperatives, in the future through strict supervision to enable them the right path. sounds good, but it is still empty. financial regulation regulations are divided into three parts: access regulation, regulatory and exit regulations. regulatory focus on capital adequacy ratio. any financial institution must be settled, meaning that, if the loss of financial institutions must have money to pay their own . the bank and have money, but the money did not transfer the property to the bank. bank loans out the door as long as there is risk. If there is a loss, the rationale for application of bank profits to pay, profit is not enough to use the bank's own capital to lose ...
