What Is the Risk In Financial Institutions?

Financial institutions refer to financial intermediaries engaged in the financial industry and are part of the financial system. The financial industry includes banks, securities, insurance, trusts, funds and other industries.

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Financial Institution means

According to different standards, financial institutions can be divided into different types:

In 2010, the People's Bank of China issued the "Code for Financial Institutions" (hereinafter referred to as the "Code"), which unified the classification standards for Chinese financial institutions at a macro level, and for the first time defined the coverage of Chinese financial institutions and defined the specific composition of various financial institutions. , Standardized the statistical coding methods and methods of financial institutions.

Classification of financial institutions in the Code:

Monetary authority

1,

Financial institutions usually provide one or more of the following

Financial institution risk management mainly involves market risk,

In recent years,

Construction of small financial institutions and deposit insurance system

"Promote the construction of the deposit insurance system and create a level playing field for small financial institutions."

The State Council issued and issued the Guiding Opinions on Financial Support for Economic Structural Adjustment and Transformation and Upgrading. The central bank governor Zhou Xiaochuan made the above remarks when talking about the implementation of the requirements and deployment of the central and the State Council at a national teleconference on the financial services experience exchange of small and micro enterprises.

Zhou Xiaochuan also mentioned that it is necessary to comprehensively use a variety of monetary policy tools such as quantity and price to give full play to the guiding role of reloans, rediscounts and differential reserve dynamic adjustment mechanisms, and continue to implement low deposit reserve ratios for small and medium-sized financial institutions. In order to revitalize the stock, make good use of the increase and increase the source of credit funds for small and micro enterprises.

Deposit insurance system on the string?

Zhou Xiaochuan said that it is necessary to actively develop small financial institutions that meet the needs of small and micro enterprises' financial services. Compared with large financial institutions, small financial institutions serving small and micro enterprises have advantages in information and cost. Access to financial institutions for private capital should be relaxed.

In the eyes of most banking professionals, small and medium-sized banks and small and medium-sized enterprises are "in the door", but the development of small and medium banks requires a deposit insurance system to protect them. The reason is that if there is no deposit insurance system for protection, there will be unfair competition between small and medium banks and large state-owned banks.

At this stage, China has not yet established an explicit deposit insurance system. However, large state-owned banks enjoy national credibility as their implicit guarantees, while small and medium-sized banks do not possess the above advantages and are relatively unfair in the market. From the perspective of difficult loans for small and micro enterprises, it is not too late to establish a deposit insurance system.

Generally speaking, most countries that have completed the marketization of interest rates have established deposit insurance systems. With the advancement of China's interest rate liberalization process, the voices of various circles on the deposit insurance system have become increasingly high.

On July 19, 2013, the central bank substantially promoted the process of interest rate liberalization. The central bank announced that with the approval of the State Council, since July 20, 2013, lending rates for financial institutions have been fully liberalized.

The advancement of interest rate liberalization will lead to increased competition among banks and a significant reduction in profit margins. At the same time, there is a moral hazard for both savers and lenders, that is, savers may ignore the risk and choose financial institutions with high interest rates. To obtain loans, lenders have to invest more in projects with higher risks and returns, and systemic risks will rise.

In order to resolve the run-up crisis brought by the increase of non-performing loans and the devaluation of banks, it is indeed necessary to establish a deposit insurance system so that the bank management has a self-restraining mechanism. Judging from the decision-making action of promoting interest rate marketization and their position, the time has come to promote the deposit insurance system.

Monetary policy continues to be sound

Zhou Xiaochuan also stated that he will continue to implement a sound monetary policy, maintain a reasonable total amount of money and credit, and create a good financial environment for the development of small and micro enterprises.

Statistics from the central bank show that as of the end of June 2013, the balance of RMB small and micro-enterprise loans of major financial institutions and small rural financial institutions and foreign banks was 12.25 trillion yuan, a year-on-year increase of 12.7%, and the growth rates were 2.3 times higher than the loans of large and medium-sized enterprises during the same period And 1.9 percentage points.

In terms of incremental growth, RMB corporate loans increased by 2.42 trillion yuan in the first half of 2013, of which small and micro enterprise loans increased by 1.03 trillion yuan, accounting for 42.6% of all corporate loan growth during the same period.

Zhou Xiaochuan also proposed that in 2013, financial institutions should be encouraged and guided to increase their credit investment in small and micro enterprises to achieve two or more (the annual growth rate of loans to small and micro enterprises is not lower than the average growth rate of loans in the year). , The loan increase is not lower than the same period last year) target.

On specific measures, Zhou Xiaochuan said that it is necessary to improve the implementation of credit policies, improve the evaluation of the effectiveness of SME credit policy guidance, and guide financial institutions to further expand credit to small and micro enterprises in accordance with the requirements of supporting, controlling, and maintaining pressure. .

At the same time, on the one hand, it promotes commercial banks to develop financial products and services suitable for financing characteristics of small and micro enterprises, such as pledge of receivables and movable property; on the other hand, it supports eligible commercial banks to issue special loans for small and micro enterprises Financial bonds.

So far, all eight national joint-stock banks that have been listed have been issued or have publicly expressed their intention to issue small and micro enterprise financial bonds. By the end of October 2012, the CBRC had approved 319.5 billion yuan in financial debt for small and micro enterprises.

In addition, Zhou Xiaochuan also proposed that the interest rate liberalization reform should be steadily promoted, the fundamental role of the market in resource allocation will be exerted to a greater extent, and the credit availability of small and micro enterprises will be improved.