What Is the Importance of Business Finance?

Commercial financial institutions are reformed and organized in accordance with the modern enterprise system. For profit-oriented banks and non-bank financial institutions, they have undertaken all commercial financial services. Commercial financial institutions, in accordance with market rules and out of business standard behavior goals, arrange their asset and liability structures appropriately and reasonably to maximize profitability on the premise of liquidity and security.

Commercial financial institution

China's commercial financial institutions include bank financial institutions and

Since China's commercial financial institutions are established in accordance with the Company Law and corresponding financial laws and regulations, our country

The relationship between commercial financial institutions and policy financial institutions

The financial industry in a country with a modern market economy can be divided into two categories, commercial finance and policy finance. Commercial finance, in general, refers to the financing of commercial finance institutions in accordance with market mechanisms and principles. Policy finance, that is, a kind of special financing through finance, is carried out under the leadership of a country's government to match the country's specific economic and social development policies. In a market economy, the market is a resource allocation system, and the government is a resource allocation system. The market's resource allocation function is efficient, but it is not omnipotent. The market mechanism also has its own inherent defects. Economics calls them "market failures" and "market defects". "Market failure" and "market defects" provide the necessary and reasonable basis for government intervention and intervention. Therefore, as one of the main ways of modern market economy resource allocation, the financial market must of course be based on market mechanisms and principles in regulating the allocation of financial resources, so as to be efficient, and at the same time, the failure of market mechanisms in the allocation of financial resources Problems and deficiencies also need to be corrected by the government by creating policy-oriented financial institutions to achieve the organic unification of the economic efficiency and social rationality of social resource allocation. Commercial finance and policy finance are two indispensable parts of a complete financial continuum in a market economy country. Among them, commercial finance operating under the market mechanism is the main part, and government finance-led policy finance is Necessary supplement.

Commercial financial institutions and policy financial institutions are important components of China's financial organization system. The nature, behavior characteristics, business scope, and financing principles of the two are different. From a nature point of view, commercial financial institutions engaged in commercial finance are of a corporate nature, commercial and profitable; while policy financial institutions operate policy-oriented financial services and are special financial institutions, reflecting the will of the country and society. Sex. From the perspective of behavior characteristics, commercial financial institutions, as corporate legal persons engaged in financial transactions, are market-oriented. Generally following the relevant national laws, the main behavioral characteristics are the pursuit of their own financial benefits and profit maximization, and social benefits are reflected in financial benefits. The opposite is true of policy financial institutions,

Although it does not completely consider its own financial benefits, as a whole, as a government financial institution, it must focus on the implementation of national social and economic policies and give priority to social benefits. The behavioral characteristics of policy-oriented financial institutions are to act in accordance with government policies and to target socio-economic benefits. Commercial financial institutions are market-oriented and aim to maximize profit. The connection of policy financial institutions with the government's economic functions is a tool for implementing government policies, and its goals are policy and social benefits. From the perspective of business scope, the business scope of commercial financial institutions is very wide. The business development of commercial financial institutions in the modern financial system has comprehensive characteristics and trends, that is, it operates diversified financial services at the same time. Policy

As financial institutions are adapted to different policy orientations and business areas, they often have specific business scope and targets. For example, the National Development Bank takes the national key construction as the main financing object and mainly handles policy loans and discount interest for key national construction (including capital construction and technological transformation); the Agricultural Development Bank of China assumes the national grain, cotton and oil reserves, agricultural and sideline products Policy loans in the areas of acquisition and agricultural development are the main businesses; China Exim Bank mainly provides policy financial support for the import and export of capital goods such as mechanical and electrical products and complete sets of equipment. From the perspective of financing principles, commercial financial institutions, based on market rules and out of business standards, use "liquidity, profitability, and security" as financing guidelines, while policy-oriented financial institutions generally rely on the economic functions of the government. Based on the policy and policy, arrange its financing activities and asset-liability structure in accordance with the government's intention. Specifically, the specificity of its financing standards lies in:

(1) Non-intervention of projects that commercial financial institutions can engage in, mainly operating and undertaking projects that the private sector and commercial financial institutions are unwilling to engage in. For this reason, policy financial institutions are often regarded as institutions that fill gaps in the capital market;

(2) It mainly provides medium- and long-term low-cost (low-interest) funds, some of which cannot be repaid on time and the price is lower than the cost of financing. The losses incurred for this purpose are subsidized by the government to avoid the lure and interference of profits;

(3) Provide guarantees, interest subsidies, or investment and financing for financial activities that are in line with policy objectives by other financial institutions to support, encourage, attract, and promote more financial institutions to engage in policy financing activities. In addition, the biggest functional difference between commercial financial institutions and policy financial institutions is that commercial financial institutions participate in credit creation, while policy financial institutions generally do not handle commercial banking services such as demand deposits, exchanges, settlements, and cash receipts and payments. Liabilities are the money that the monetary system has created, and their assets are generally earmarked. Therefore, policy financial institutions generally do not have the function of credit creation.

From the above analysis, we can summarize the relationship between commercial financial structures and policy financial institutions into three types of relationships:

1. Equal relations. Commercial financial institutions and policy financial institutions are equal in legal status. They are independent legal entities. Policy-based financial institutions represent specific financial services through commercial financial institutions. It is the relationship between the principal and the agent and the relationship between equal subjects. Although policy banks enjoy certain preferential treatment, they do not have the right to override commercial financial institutions, otherwise it will constitute an infringement of the interests of commercial financial institutions. Therefore, we cannot govern commercial finance with policy financial institutions.

2. Complementary relationship. From the above explanation, we know that commercial financial institutions constitute the main body of a country's financial organization system and undertake most of the financial services, while policy financial institutions undertake financial services that commercial financial institutions are unwilling to and cannot handle. Activities in areas where commercial financial activities are weak or missing. The two form a relationship of main and auxiliary, complementary rather than substitution, competition. ?

3. Cooperation relationship. Many policy banks are restricted by the lack of branches, and their policy business development is indirect.

That is, through commercial banks to refinance to the last lender. In addition, policy banks give encouragement and support to commercial banks engaged in business activities that meet the requirements of government policies, such as reloans, interest subsidies, and repayment guarantees, and conduct certain supervision in their business. Therefore, there is a certain degree of cooperation between the two.

The relationship between commercial financial institutions and government departments

From the perspective of promoting economic development, economic and financial work have great similarities and complementarities. The local economy needs the services and inputs of commercial financial institutions to promote economic growth; the commercial financial institutions need the support and assistance of local governments to achieve the rapid development of business in the region. The development of commercial financial institutions is inseparable from the support of various government departments and local governments, the introduction of financial services suitable for the needs of local economic development, in line with the needs of government industrial policies, and increasingly improving relations with local governments. Grow stronger. The government and commercial financial institutions should establish a positive interaction. However, from the perspective of legal relationship, it must be recognized that commercial financial institutions are independent market-oriented enterprise legal persons. To operate commercial operations in accordance with market mechanisms, this requires clear property rights, clear rights and responsibilities, separate government and enterprise, and Sex machine

The independence of the structure must be guaranteed. Governments and government departments as national administrative agencies cannot treat commercial financial institutions as

Its vassals cannot interfere with the business activities of commercial financial institutions. Therefore, the "Commercial Banking Law" stipulates that the branch structure of commercial banks shall be set according to business needs rather than administrative divisions (Article 19). Except for specific projects approved by the State Council, no unit or individual may force a commercial bank to issue loans and provide Guarantees (Article 41); commercial banks must accept the audit supervision of audit institutions (Article 63), supervision of the Supervisory Board (including relevant government departments) (Article 18), and issue financial bonds and overseas borrowings to the relevant government agencies for approval ( Article 45), without any other administrative interference. Article 23 of the Insurance Law stipulates that no unit or individual may illegally interfere with the insurer's obligation to perform compensation or pay insurance premiums, or restrict the right of the insured or beneficiary to obtain insurance premiums. Article 7 of the Administrative Measures for Trust and Investment Companies stipulates that trust investment companies that engage in trust activities shall abide by the provisions of laws and regulations and the provisions of trust documents, and shall not harm the national interests, social public interests and the legitimate rights and interests of others. Article 24 provides that a trust and investment company may set up a variety of trust businesses according to market needs, according to the purpose of the trust, the type of trust property, or the way the trust property is managed. Article 135 of the Securities Law stipulates that securities companies have the right to operate independently according to law, and their legitimate operations are not subject to interference.