Zou Lan, Sun Tianqi, and Li Bin of the Central Bank spoke out! Serve high-quality development and guard the bottom line of risks

Original title: Serve high-quality development well and keep the bottom line of risk - the relevant responsible person of the People's Bank of China talks about the implementation of the spirit of the Central Economic Work Conference

The Central Economic Work Conference held at the end of 2023 systematically deployed the economic work in 2024. How to implement the important arrangements of the meeting, such as "a prudent monetary policy should be flexible, moderate, precise, and effective," "sustainably and effectively prevent and resolve risks in key areas," and "expand high-level opening up"? A relevant responsible person of the People's Bank of China recently gave an interview to a Xinhua reporter.

The picture shows the People's Bank of China headquarters building. Xinhua News Agency

Create a good monetary and financial environment for high-quality economic development

The Central Economic Work Conference proposed that a prudent monetary policy should be flexible, moderate, precise and effective. Zou Lan, director of the Monetary Policy Department of the People's Bank of China, said that the People's Bank of China will strengthen counter-cyclical and cross-cyclical adjustment, and exert efforts in three aspects: aggregate, structure and price, so as to create a good monetary and financial environment for high-quality economic development.

In terms of aggregate volume, the People's Bank of China will comprehensively use basic monetary tools such as open market operations, medium-term lending facilities, re-lending and re-discounting, and reserves to provide strong support for the scale of social financing and the reasonable growth of monetary credit. At the same time, it is necessary to prevent the accumulation of funds, guide financial institutions to strengthen liquidity risk management, and maintain the smooth operation of the money market.

Zou Lan said that it is necessary to reasonably grasp the relationship between the two largest financing markets, bonds and credit. On the one hand, we will strengthen coordination and cooperation with fiscal policies to ensure the smooth issuance of government bonds and continue to promote the development of the corporate credit bond and financial bond markets; on the other hand, we will support financial institutions to actively tap credit demand and project reserves around the nine key tasks, and take multiple measures to promote the reasonable growth of loans.

In terms of structure, the People's Bank of China will give full play to the dual functions of monetary policy tools, such as total quantity and structure, revitalize the stock and improve efficiency.

"To optimize the structure of capital supply, we must achieve an increase and a decrease. Zou Lan said that in terms of growth, it is necessary to further improve the guidance efficiency of monetary and credit policies, closely follow major strategies, key areas and weak links, and focus on five major articles on science and technology finance, green finance, inclusive finance, pension finance and digital finance, and serve high-quality development. In terms of reduction, it is necessary to revitalize the financial resources that have been inefficiently occupied through various means, such as debt restructuring and market liquidation.

In terms of prices, Zou Lan said that the People's Bank of China will continue to deepen the market-oriented reform of interest rates and promote the steady decline of comprehensive social financing costs. At the same time, financial institutions should be guided to speed up the development of the over-the-counter bond market, which will not only provide more investment options for households, but also further unblock diversified channels for the conversion of savings into investment.

Firmly adhere to the bottom line of no systemic risk

In recent years, the People's Bank of China, together with relevant departments and localities, has resolutely fought a tough battle to prevent and resolve major financial risks, and a number of prominent risk points with great impact, urgency and overall situation have been effectively dealt with, and financial risks have converged and are generally controllable.

Sun Tianqi, director of the Financial Stability Bureau of the People's Bank of China, said that the current mainland financial system is generally stable. According to the results of the central bank financial institution rating for the second quarter of 2023 released by the People's Bank of China, 3,655 banks are within the safety boundary, and their assets account for 98.3% of the total assets of all participating banks. The 24 major banks have always been rated good, and their assets account for about 70% of the total assets of the banking industry, which is the "ballast stone" of the mainland's financial system. After continuous reform and risk reduction, the number of high-risk banks has shown a downward trend, which has dropped by almost half compared with the peak in 2019.

The Central Economic Work Conference proposed to continue to effectively prevent and resolve risks in key areas. Sun Tianqi said that as the mainland's economy continues to rebound, the mainland's financial system will be healthier and more stable. In the next step, the financial management department will comprehensively strengthen financial supervision, bring all financial activities into supervision in accordance with the law, and eliminate regulatory gaps and blind spots. Give full play to the role of stress testing, improve the financial risk monitoring, assessment, prevention and control system, establish an early correction system with hard constraints for new high-risk financial institutions, clarify the rectification period and requirements, and achieve "early identification, early warning, early exposure, and early disposal" of risks.

"The level of deposit protection in mainland China remains high, and deposit insurance can provide full protection for more than 99% of depositors. Sun Tianqi said that we should further improve the risk disposal responsibility mechanism with consistent rights and responsibilities and compatible incentives and constraints, give full play to the professional and normalized risk disposal functions of deposit insurance, strengthen the construction of the financial stability guarantee system, and firmly guard the bottom line of no systemic risks.

Improve the quality and level of RMB internationalization

The Central Economic Work Conference has made important arrangements for expanding high-level opening up. Promoting the international use of the renminbi is also an important part of promoting high-level opening-up.

"With China's economic development and the improvement of comprehensive national strength, the demand for business entities to use RMB for cross-border and international receipts and payments in trade and investment is also rising. Li Bin, director of the People's Bank of China's macro-prudential management bureau, said that in the first 11 months of 2023, the amount of cross-border RMB receipts and payments was 48 trillion yuan, a year-on-year increase of 24%. Among them, the proportion of RMB settlement in trade in goods is 25%, the highest level in recent years.

In the next step, the People's Bank of China will pay more attention to improving the quality and level of RMB internationalization, steadily and solidly promote the international use of RMB, and better meet the market needs of business entities such as transaction settlement, investment and financing, and risk management.

Li Bin introduced that the People's Bank of China will focus on trade and investment facilitation, continue to do a good job in institutional design, policy support and market cultivation, improve the basic institutional arrangements and infrastructure construction for cross-border use of RMB, and enhance the ability of cross-border RMB business to serve the real economy and promote high-quality development. At the same time, we will promote the comprehensive institutional opening of the financial market in a prudent and orderly manner, further improve the degree of openness and access to the mainland's foreign exchange and financial markets, enrich risk hedging tools, and build a more friendly and convenient investment and financing environment.

In addition, the People's Bank of China will strengthen the construction of the RMB cross-border payment system to improve the efficiency and security of RMB clearing. Promote the construction of the offshore RMB market, improve the RMB liquidity supply mechanism in the offshore market, enrich the offshore RMB risk management tools, and enrich the offshore RMB financial products.

"We will continue to strengthen the supervision of cross-border RMB business to ensure that the internationalization of RMB is steadily advanced on the premise of maintaining the bottom line of safety. Li Bin said. (Reporter Wu Yu)

责编:史健 | 审核:李震 | 监审:万军伟