Abstract With the approval of the State Council, the People's Bank of China decided to fully liberalize the lending rate control of financial institutions since July 20. Cancel the lower limit of the financial institution loan interest rate of 0.7 times, the financial institution independently determines the loan interest rate level according to commercial principles; cancel the bill discount rate control, change...
With the approval of the State Council, the People's Bank of China decided to fully liberalize the lending rate control of financial institutions since July 20. Cancel the lower limit of the financial institution's loan interest rate of 0.7 times, the financial institution independently determines the loan interest rate level according to commercial principles; cancel the bill discount rate control, and change the discount rate based on the rediscount rate to determine the way, determined by the financial institution; Credit union loan interest rates no longer set an upper limit; in order to continue to strictly implement differentiated housing credit policies and promote the healthy development of the real estate market, the floating range of personal housing loan interest rates will not be adjusted. The central bank decided to fully liberalize the lending rate control of financial institutions since July 20, which marked a big step forward in interest rate liberalization. The steady progress of interest rate marketization will help to further develop the basic role of market allocation resources, and is of great significance for promoting financial support for the development of the real economy, economic restructuring, and transformation and upgrading.
The timing of reform is basically mature
In late May, the State Council approved the National Development and Reform Commission's "Opinions on Deepening the Reform of the Economic System in 2013", stating that "steadily promote the market-oriented reform of interest rate exchange rates." In just two months, the interest rate marketization reform achieved remarkable results. But in fact, China's interest rate marketization reform has gone through 17 years of history, laying a good foundation for further reform.
Since 1996, in accordance with the idea of ​​“opening up, forming success, and adjustingâ€, the central bank has continuously relaxed interest rate control on the one hand; on the other hand, it has focused on improving the market-based interest rate pricing mechanism and expanding market-based interest rate coverage. Through gradual reforms, the central bank currently only manages the upper limit of the RMB deposit interest rate of financial institutions and the lower limit of the loan interest rate. The interest rates of the money market, bond market and domestic and foreign currency deposit and loan have been marketized. In June and July 2012, the central bank further expanded the floating range of deposit and loan interest rates of financial institutions: one is to adjust the upper limit of the floating range of deposit interest rates of financial institutions to 1.1 times the benchmark interest rate; the other is to lower the lower limit of the floating range of financial institutions' loan interest rates. Adjusted to 0.7 times the benchmark interest rate.
"Overall, China's macro and micro conditions for further reform of interest rate marketization are basically in place." The relevant person in charge of the central bank said in an interview that from the macro level, China's current economic operation is generally stable and the price situation is basically stable. A favorable opportunity to further advance reforms. From a micro perspective, with the steady advancement of financial reforms in recent years, the financial financial constraints of financial institutions have been further strengthened, and the independent pricing power has been continuously improved. Enterprises and residents are also more adaptable to the financial environment of market-oriented pricing.
In addition, from the market base, after years of construction and cultivation, the Shanghai Interbank Offered Rate (Shibor) has become an important benchmark for the pricing of financial products and services such as corporate bonds and derivatives; from the perspective of regulatory capabilities, monetary policy to financial markets The channels for the transmission of products have also been relatively smooth. "On the premise of comprehensively assessing the maturity of various basic conditions and focusing on risk prevention, the central bank decided to further promote the reform of interest rate marketization," the official said.
Conducive to transfer mode structure
At present, China's financial operations are generally stable, but the problem of unreasonable distribution of funds still exists. According to central bank data, as of the end of June, the broad money M2 balance reached 105.45 trillion yuan, but the use of funds was not efficient, and a considerable part of the funds did not flow into the real economy. This has not only brought risks such as local debt expansion and shadow banking, but also promoted the rise in prices and asset prices to some extent. A large amount of capital flowing into real estate and “two highs and one surplus†has further aggravated structural problems.
Especially in late June, due to a series of storms caused by financial constraints in the interbank market, the issue of “idling†funds in the financial sector was exposed. This means that revitalizing the stock and optimizing the allocation of financial resources is the key to solving the major problems in the financial industry and an important driving force for restructuring the structure. Therefore, it is extremely urgent to promote the reform of interest rate marketization.
After the lower limit of the loan interest rate is liberalized, the space for financial institutions and customers to negotiate pricing will be further expanded. On the one hand, it will help financial institutions to adopt differentiated pricing strategies, reduce corporate financing costs, and continuously improve their own pricing power and change their business models. Improve service levels and further increase financial support for enterprises and residents. On the other hand, it will encourage enterprises to choose different financing channels according to their own conditions. As enterprises increasingly finance through bonds and stocks, it will not only help develop direct financing market, but also promote the diversification of social financing. Financial institutions have increased the space for small and micro enterprise loans.
Rural credit cooperatives are the main force of rural financial services. They no longer set an upper limit on the loan interest rates of rural credit cooperatives, which is conducive to rural credit cooperatives to independently price according to the principle of income coverage risks, improve the willingness to issue agricultural loans, and promote the improvement of rural financial services. Has a positive meaning.
Steadily and orderly advance reform
Zhou Xiaochuan, the governor of the central bank, once said that China is still a transitional economy, the economic operation environment is complex, the transmission mechanism of monetary policy is not fully smooth and sound, and the interest rate marketization reform needs to interact and promote each other in various fields. Therefore, there must be planning and Steps, unswervingly advance.
The interest rate marketization reform also reflects the gradual and gradual characteristics. For example, the reform did not adjust the current commercial personal housing loan interest rate policy, and the lower interest rate limit remained unchanged at 0.7 times the benchmark loan interest rate. The central bank said that this is to implement the relevant real estate market regulation and control policies, curb investment speculative purchases, and promote the stable and healthy development of the real estate market. Therefore, commercial banks are required to continue to strictly implement differentiated housing credit policies.
The industry generally believes that the most important and difficult part of the interest rate marketization reform is to adjust the deposit interest rate. The reform has not further expanded the floating range of deposit interest rates of financial institutions. "The main consideration is that the market-based reform of deposit interest rates will have far-reaching effects and the conditions required will be relatively higher." The relevant person in charge of the central bank said that since 2003, China’s financial institutions’ corporate governance reform has made significant progress, but it has not yet Fully in place, while the deposit insurance system, financial market exit mechanism and other supporting mechanisms are gradually being established. To this end, the central bank will work with relevant departments to further improve the basic conditions required for the marketization of deposit interest rates, and promote the marketization of deposit interest rates in a safe and orderly manner.
The person in charge also said that the next phase of the central bank will continue to improve the market-based interest rate formation mechanism, optimize the financial market benchmark interest rate system, establish and improve the financial institution's independent pricing mechanism, gradually expand the market-oriented pricing range of debt products, and give greater play to the market mechanism. The fundamental role in the allocation of financial resources.
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