One article to understand the long-term three-term plan: the establishment of new macro-prudential authority

One article to understand the long-term three-term plan: the establishment of new macro-prudential authority

This article reads the three consecutive plans: after ten years of timely adjustments, the newly-established Macro Prudential Administration issued the three final plans, which was officially released today. This is 10 years after the last release of the three rules.

  On February 2nd, the Office of the Central Organization Establishment Committee issued the “Public Banking Provisions, Internal Institutions and Staffing Provisions”
(hereinafter referred to as the “Provisions”), which clearly clarified the internal arrangements and staffing of the merger.

  In fact, every previous adjustment was closely related to the economic growth at that time.

For example, in 2003, when the banking industry was facing major reforms, the “Financial Stability Bureau” came into being. In 2008, with the continuous deepening of domestic economic reforms, monetary and exchange rate policies attracted much attention. The “Exchange Rate Division” (Monetary Policy Division II)) Spring is born.

  Compared with 2008, the “Exchange Rate Division” was abolished in the internal institutions, and a “Macro Prudential Administration” was added.

The functions of the macro-prudential administration include, in addition to conducting research and evaluation of exchange rate policies, assessment, identification and disposal mechanisms for complex financial institutions in the system.

In terms of staffing, one president and four vice presidents will be gradually established.

The actual number of deputy governors currently working is one more than the number of persons in the set-up plan.

  Yin Zhentao, deputy director of the Law and Finance Research Office of the Institute of Finance of the Chinese Academy of Social Sciences, believes that from a specific perspective, the new ideas for transforming financial supervision functions are more reflected in: taking the lead in systemic financial risk prevention and emergency response, and responsible for financial holding companies, etc.The basic rules of financial conglomerates and system economics financial institutions, monitoring and analysis, and consolidated supervision, take the lead in organizing the preparation and implementation of the system’s major financial institution recovery and disposal plans.

  The newly established macro-prudential management bureau, the framework of the dual backbone framework is changed. The three plans released this time supplement the new situation in the financial market, and make targeted internal mechanism adjustments for market supervision and exchange rate mechanisms.

The preliminary monetary policy department 2 was cancelled, and a new macro-prudential authority was newly formulated. The dual-chain framework of monetary policy and macro-prudential policy has been officially initiated.

  Since the economic crisis in 2008, monetary policy, as a tool for managing total demand during the transition period, has certain limitations in maintaining financial stability, and the concept of macro-prudence has emerged.

  Many parties believe that macro-prudential policy is a useful supplement to monetary policy. The synergy and complementarity of the two can effectively deal with systemic financial risks, and better maintain currency stability and financial stability.

  For example, in the report “Macro-prudential Policy Framework and Financial Supervision System Reform”, it was pointed out that in the case that macro-sectors (such as the central bank) are responsible for economic cycle and cross-market risk judgment and related macro-prudential policy formulation, if they lack effective and effective policiesThe means of supervision and implementation will inevitably affect the effectiveness of the policy. Therefore, it is necessary to incorporate macro-prudential policy formulation and the necessary prudential supervision power into the same institution.

  After the announcement of the three plans, the dual-pillar operation framework was formally launched.

  ”The Department of Original Goods Administration 2 is mainly responsible for the issue of RMB international exchange rate. However, the continuous advancement of the reform of exchange rate marketization and the renminbi going abroad under the Belt and Road Initiative may become increasingly blurred.

Yin Zhentao believes that the Department of Monetary Policy and macro prudential authority will become the two core drivers of monetary policy and financial stability, and the transformation of financial supervision measures will be further strengthened with the replacement of macro prudential supervision.

  ”The internal institution has an additional macro-prudential bureau, and the corresponding institutions are needed to do these things.

In terms of institutional setting, it will be further strengthened by ‘strengthening macro-prudential considerations’.

“Dong Ximiao, deputy dean of the Chongyang Institute of Finance at Renmin University of China, said that the establishment of a new macro-prudential bureau reflects the trends and considerations in this regard.

  In addition to changes in institutional settings, the “Regulations” have also added statements about responsible macro-prudential management in major aspects.

  The “Provisions” point out that, step by step, we should take the lead in establishing a macro-prudential management framework, draft major laws and regulations of the financial industry and other relevant laws and regulations, formulate a basic system of prudential supervision, and establish and improve a basic system of financial consumer protection.

In terms of variable changes, strengthen macro prudent management and systemic financial risk prevention measures, and keep the bottom line where systemic financial risks do not occur.

  Specifically, the specific work composition of the macro-prudential authority includes: leading the establishment of a macro-prudential policy framework and basic procedures, and the system of co-existing assessment, identification and disposal of financial institutions; leading financial holding companies and other financial groups and systems constitute the basic rules of financial institutionsFormulate, monitor, analyze and consolidate supervision; lead the macro prudent management of the foreign exchange market, study and evaluate the RMB exchange rate policy; formulate and implement a cross-border RMB business system, promote the cross-border and international use of the RMB, and implement cross-border capital countercurrent cycle adjustments; coordinate inOnshore and offshore RMB market development; promote inter-bank monetary cooperation and take the lead in proposing RMB capital account convertibility policies.

  ”Drafting and implementing a cross-border RMB business system, promoting the cross-border and international use of RMB, and implementing counter-cyclical adjustments of cross-border funds” means that the process of RMB internationalization has gradually started on the basis of the gradual advancement of exchange rate reform.

For terrorism, some people have stated that the internationalization of the renminbi is an important factor in the process of opening financial markets to developing countries.

  There will be one president and four vice presidents. The three plans stipulate that one president and four vice presidents will be gradually established.

  According to the “Regulations”, in terms of establishment, there are 779 administrative establishments (including 15 establishments of the Secretary of the Office of the Finance Committee).

1 president, 4 vice presidents, 92 director-level positions (including 3 leadership positions of the Secretary of the Finance Committee Office, 1 each of the Deputy Secretary-General of the Monetary Policy Committee, and 2 full-time deputy secretaries of the party committee of the agency, 1 secretary of the Commission for Discipline Inspection of the agency, 3 leaders of retired cadres and bureaus).

  It seems that there are currently 6 long-term vice presidents, namely Guo Shuqing, Chen Yulu, Pan Gongsheng, Fan Yifei, Zhu Hexin, and Liu Guoqiang.

In addition to Guo Shuqing, the party secretary, who does not occupy the quota of four vice presidents, there is another appointment arrangement for the vice president.

  In addition, efforts have been made to reform the system, and there has been controversy over the transition zone system.

According to such disputes, the 合肥夜网 “Provisions” states that the People’s Bank of China’s large-scale branch system adjustments and the establishment, responsibilities, and regulations of the subordinate industry units are stipulated.

  ”Regional reform, this time also proposed to be drafted, and responded (to the market’s heated discussion).

Dong Ximiao said.

  The establishment of the district bank can be traced back to 20 years ago.

In 1998, in order to enhance the authority of implementing monetary policy and the independence of financial supervision, nine first-level branches (ie, regional branches and central branch offices) were gradually established.
  The structure of the Financial Commission further clarified that in the new financial regulatory framework, the gradually important role has become increasingly prominent.
  In order to strengthen the coordination of financial supervision, make up the shortcomings of supervision.

The Fifth National Financial Work Conference proposed the establishment of the State Council’s Financial Stability Development Committee (hereinafter referred to as the Financial Committee), with the office located at the People’s Bank of China, strengthening the macro-prudential management and systemic risk prevention of the People’s Bank of China, incorporating the supervision duties of financial supervisory departments, and strengtheningRegulatory accountability.

  The “Provisions” clearly set the Office of the Finance Committee at the People’s Bank of China, accept the direct leadership of the Finance Committee, undertake routine work of the Finance Committee, be responsible for promoting the Party Central Committee, the State Council’s decision-making on financial work and the Financial Commission’s work arrangements, and organize the drafting of the financial industry.Major reform and development plans, proposing systemic financial risk prevention measures and major financial policy recommendations, coordinating the establishment of central and local financial supervision, risk treatment, consumer protection, information sharing and other collaborative mechanisms, committed to guiding local financial reform and development and supervisionSpecific work, drafting accountability measures for financial management departments and local financial supervision and undertaking supervision and accountability.

There is a secretary office of the Finance Committee Office, which is responsible for the daily affairs of the Finance Committee Office.

  ”Setting the Finance Committee on the budget, (staff establishment), the Secretary of the Finance Committee Office has 15 establishments, with staffing and consolidation staff, which can be further put into the Finance Committee office for practical work.

Dong Ximiao said.
He said that the Financial Commission’s further implementation will help strengthen the coordination between monetary and regulatory policies, and play a positive role in preventing financial market risks and market stability.

  But he also suggested that financial supervision needs further coordination.

“In the primary aspect, central financial supervision and local financial supervision must be further coordinated. The structural adjustment and optimization of the entire financial system, and reform and opening up, need to be further promoted. In this process, it is necessary to gradually take the lead and coordinate role.”

  After the introduction of the first three plans for leading Internet financial supervision, coordinating Internet financial supervision has become one of the main responsibilities.

  According to the “Regulations”, the main responsibilities of the People’s Bank of China include: taking charge of the planning of major financial infrastructure construction and coordinating the implementation of supervision; coordinating the supervision of Internet finance.

In the division of functions of the Financial Market Division, the Regulations also supplement the supervision of Internet finance and the evaluation of fintech innovation businesses.

  ”The preliminary statutory budget adjustment, more prominent macro-prudential supervision and cross-industry regulatory coordination functions, are more adaptable to the status quo of providing one-stop financial products with mutual funds, which can eliminate regulatory gaps and regulatory arbitrage, and improve mutual funds.The industry regulates the operation level.

Xue Hongyan, director of the Internet Finance Center of Suning Financial Research Institute, told First Financial reporter.

  As early as 2018, Yi Gang, the transitional governor, stated that the People’s Bank of China will explore the division of shadow banking, real estate finance, and internet finance into a macro-prudential policy framework, and replace interbank certificates of deposit and green credit performance assessment with MPA (macro-prudential assessment system)Assessment.