Domestic banks not lack of liquidity

In terms of loan from local financing platform, up to the end of the first season, the loan balance is 9.59 trillion Yuan. There are various ideas in the society, and the number of local financing platforms is always unclear. The date I quoted, the balance amount on the platform, in terms of banks, is 9.59 trillion Yuan. Non-performing loan ratio is only 0.14%. The local debts mainly belong to productive liabilities. Compared with European debts, the big difference is that China’s local debts is productive instead of consumptive, and have corresponding asset guarantee. The overall risk is manageable. In the next step, we will strengthen the specification of platform loan management to reduce the risks and hidden danger, according to the principle of total amount control, classified management, differentiated treatment and gradual resolution. Meanwhile, we should pay close attention to studying systems and methods for regulating local government loan management.

In the aspect of real estate loans, up to the end of April, the loan balance is over 13 trillion Yuan, among which housing mortgage loans accounts for nearly 70%, i.e. a major part of real estate loans. Chinese people have credibility and loan default rate is rather low, non-performing loan ratio far less than 1%. In addition, the rising trend of housing has been effectively controlled. We are taking an list type management to real estate developers, and the management has been further strengthened. The non-credit financing has been effectively controlled, and the overall risk of real estate loans is also controllable.

In terms of wealth management business, up to the end of the first season, the book balance of wealth management capital is 8.2 trillion Yuan, 70% of which has been put into real economy. To prevent financial funds flowing from real to virtual, total amount control is put forward on financial funds’ investment into nonstandard credit assets. At the beginning of the year, we have a No.8 article, in which specific provisions are stated on the total amount control requirements. Moreover, investment item should be in accordance with national macroeconomic regulation and control policy and industrial policy. Meanwhile, prudent risk out management requirement has also been put forward. That is to say those non-standard products management should be conducted in accordance with self-loan. A series of regulatory requirements have been set.

For the next step, we need to continue regulate wealth management business of commercial banks, strengthen behavior management and strictly control risks according to the principle of division of wealth management and credit operations, matching of products and projects, independent account management and transparency of information.

First, further improve regulatory framework of banking industry. Continue improving micro-prudent and macro-prudent regulatory framework, increase individual institutional and systematic risk identifying and coping ability, accelerate the innovation of regulatory mechanism, improve regulatory methods, enhance data quality, strengthen behavior ratification and punishment to improve the authority and pertinence of regulation. Coordinate regulatory standards, and strive to solve inter-industry inter-disciplinary regulation problems to prevent regulatory arbitrage, reduce regulatory cost and bring down the invisibility and infectiousness of financial risks.

Regulatory standards are not consistent among different regulatory sections, because of financial industry’s pilot projects in comprehensive operation, especially in wealth management. This situation is prone to institutional arbitrage, and mutual transfer of risk. So we need to improve regulatory coordination mechanism, uniform regulatory standards and scales, to guard against risks from transferring and spreading.

The third is to enhance the protection on finance consumers: to take financial consumption protection as an important goal of regulatory objectives and put it at a distinguished position; to expand market constraints and effectiveness of public regulatory through improving the mechanism for consumer rights protection; to promote the improvement of managing mechanism of service pricing, and strictly strictly regulate the behavior of financial service charges; increased information disclosure and transparency, and actively take the initiative to protect legitimate rights and interests of depositors and financial consumers.

Now there are more and more products for financial consumption, especially those designed for private consumers. We hope to see an increase in the products’ transparency. Tell the consumers what the product is about, tell them the possible benefits, and at the same time, tell them the risks. Because banks used to be places for deposition, so people believes their money is safe in the banks.

We used to say “achievement for the country, interest for you” when we try to let more people deposit their money in the banks, but now the banks are doing financing business, which is quite different from deposition. Bank financing is a kind of investment, for all investment, there are risks. Banks should inform their customers with the risks of their products. Also banks should sell their products to the right people. They need to evaluate their customers’ ability against risks. It is not proper to sell the high-risk products to customers with low risk resistance capacity. This does not meet our regulatory requirements, nor consistent with our social responsibility.

So with changes in financial market, there are a lot of works to do to protect the interest of finance consumers. On one hand to increase the transparency, on the other hand is to sell products to the right people. Besides, we also need to increase consumers’ capability to protect themselves and the ability to recognize risks.

Ladies and gentlemen, China’s economic and financial development is still at an important strategic period. CBRC will further enhance the sense of mission, the overall situation awareness, sense of urgency, and pay attention to risks, to encourage financial innovation, and actively guide the banking industry, in order to build a well-off society and make great contribution the realization China’s dream of great rejuvenation.

Thank you!