China.org.cn | October 18, 2024
21st Century Business Herald:
Large commercial banks play a crucial role in the financial system. What measures will the financial regulatory authorities take in the near future to promote the prudent operation of large banks? In June, the State Council issued the "Several Policy Measures for Promoting the High-Quality Development of Venture Capital," which proposed expanding the scope of trials for equity investment of financial asset investment companies under large banks. What implementation measures have been adopted?
Li Yunze:
Thank you for your question. I will answer this one. As you just mentioned, large commercial banks are the mainstay of serving the real economy in the financial system and the ballast for maintaining financial stability. At present, the operation and development of large commercial banks is making steady progress, the quality of assets is stable, and major regulatory indicators are within a healthy range.
As you all know, capital is the basis for the operation of financial institutions and it is also the foundation for improving the capability to serve the real economy and the barrier to resist risks. In recent years, large commercial banks have mainly relied on their own profit retention to increase capital, but with the continuous increase in bank fee reductions and interest concessions, net interest margins have narrowed, and profit growth has gradually slowed. Therefore, it is necessary to coordinate internal and external channels to replenish capital.
In order to consolidate and enhance the ability of large commercial banks to steadily operate and develop, and give better play to their role as the mainstay in serving the real economy, after research, China has planned to increase the tier-1 capital of the six large commercial banks. This will be implemented in an orderly manner, utilizing an approach of "coordinated advancement, in tranches and batches, and one policy for one bank." We will also continue to urge large commercial banks to improve their refined management level and strengthen their capabilities to pursue high-quality development under capital constraints.
At present, indirect financing still occupies a dominant position in China's aggregate private financing, which means we need to embark on a development path for technology finance with Chinese characteristics, especially sci-tech innovation investment. In the early stages, financial asset investment companies under the large commercial banks have launched pilot projects for equity investment in Shanghai, exploring the path, gaining experience and training teams. The conditions for carrying out the pilot project on a larger scale have already been put in place. According to the relevant arrangements of the State Council, in order to give full play to the leading and driving role of the pilot projects and encourage the development of venture capital, we plan to take the following measures in three aspects: First, we will carry out pilot projects in more cities. We will work with relevant departments to expand the scope of the pilot projects from Shanghai to 18 large and medium-sized cities with vibrant sci-tech innovation activities such as Beijing. Second, we will relax restrictions. We will appropriately relax the restrictions on the amount and proportion of equity investment, increasing the proportion of on-balance sheet investment from the original 4% to 10%, and raise the proportion of investment in single private equity funds from the original 20% to 30%. Third, we will optimize the assessments. We will guide relevant institutions to implement the requirements that no one who has fulfilled their duties is held liable and establish and improve long-term and differentiated performance evaluations. Next, we will summarize our experience in a timely manner and continue to carry out pilot projects in more cities. At the same time, we will continue to optimize supporting policies and actively advance the implementation of more projects as soon as possible.
That is all from me. Thank you.