![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uR4fzdje74Wf9NFSGpIwMsercdloA5yqtdN0KU2uumpL5zMf-8MLNq27WAMP83r5EH04RD9UsjuBYQSj-n83KC374IHZvbvCGHu2rohRXHqqouYntk-JEPr3Q=s0-d)
|
Shanxi Qin New Energy Group Co., a coal miner in the Shanxi province, and state-owned investor Taiyuan Industrial Park Investment Holdings Co. each subscribed for $50 million of shares. Chen Xing Development Holdings Ltd., a Hong Kong-listed Shanxi property developer, subscribed for $22 million of shares.
In ominous echoes of what happened before, and certainly after the Lehman failure, it has gotten far harder for corporate bonds to be accepted as collateral for repo financing as lenders increasingly demand top quality bonds such as Chinese sovereign bills and policy bank notes as pledges, with Bloomberg noting that "traders are having second thoughts on taking even AAA rated short-term bank debt as security in the wake of last month’s seizure of Baoshang Bank"This is gaining attention in Chinese financial media. 21st Century has an entire section dedicated to the topic.
As a result, funding among China’s financial institutions has become clogged, in some cases to the point of paralysis, which have already caused borrowing costs to spike for brokerages and smaller banks . The timing couldn’t be worse, not only due to China's slowing economy, but with liquidity traditionally far tighter at the quarter-end, and further adding to the wide-ranging ramifications of the bank seizure. All this could mean higher defaults, according to Bloomberg Economics.
“Non-bank financial institutions are actually the biggest buyers of corporate bonds in China, and if their funding chain breaks, demand for bonds, particularly those that can hardly be pledged for borrowing, will certainly get hurt," said David Qu at Bloomberg Economics in Hong Kong. “Weaker companies will suffer a rising cost when selling new bonds, which may eventually lead to higher default risks.”
"At present, 300 million yuan has been paid for one-month, three-month and one-year terms, with interest rates of 3.3%, 3.48% and 3.95% respectively. If you think the price is appropriate, you can announce the issue separately today." Traders of a city commercial bank in southwest China, which is issuing A-A certificates of deposit, told the inquirers that the bank had issued NCD one after another in early June. Each issue was subscribed for, "We have issued more than 2 billion out of a total of 4 billion."
Traders of a city firm in central China told reporters in 21st century business herald that the bank has plans to issue A-A certificates of deposit in the near future, and the market is fine.
Yesterday, information released by China Monetary Network showed that the interbank market actually issued 173 interbank certificates of deposit, totaling 93.83 billion yuan. According to estimates, the subscription rate was 78.26%, up from 77.8% last Friday.
Among them, the interest rate for AAA certificates of deposit in January was 2.8564%, and that for AAA certificates was 3.3328%, with a spread of 47.6 Bp, up 5.6 BP from last Friday's spread. The interest rate for the three-month AAA certificates of deposit is 2.9147%, the A-A certificate is 3.3921%, and the spread is 47.7 BP. The interest rate for one-year AAA certificates of deposit is 3.2684%, AAA is 3.8615%, and the spread is 62.4 BP. Both have expanded from last Friday.
Wu Di, an analyst at Huaxin Securities Research and Development Department, told reporters in 21st century business herald that the continued differentiation of inter-bank certificates of deposit grade spread is due to the decline in market risk appetite after the inter-bank certificates of deposit broke through the exchange and began to redefine low-grade inter-bank certificates of deposit. Although some easing policies have been made, there will definitely be a process of clearing market risks.Regulators are threatening a 3-year ban on banks that do not honor repo pledges in the interbank market.
On June 18, a number of bond traders confirmed to reporters in 21st century business herald that some institutions had received guidance from the regulatory authorities and would avoid default on pledge repo transactions starting today. If any organization goes against the wind, it may face the punishment of suspending relevant businesses for three years in the future. In order to prevent further aggravation of panic, the supervision requires institutions that have already defaulted on transactions or are at risk of default to do their utmost to ensure compliance. There are several ways for the market, one is to borrow money, the other is to sell bonds if it cannot borrow money or to offer substantial discounts for pledge financing. There is really no action to solve the problem with its own funds. If its own funds are insufficient, it can seek help from shareholders.Reuters: China's small banks turn to exchanges for cash as money markets tighten
A senior manager of a securities firm's asset management company also said: "after the meeting last Sunday, the liquidity of the securities firm's proprietary business has eased somewhat, but the products are still the same. yesterday, there were some securities firms that defaulted on the repurchase of their products. There are also some who have used their own funds and received their own pledged bonds through a third party. "
At the same time, some market makers are also guided by the window, hoping to accept the pledge of some low-rated bonds, but with a certain discount rate. For example, the market reported that Citic Securities' proprietary trading began to pay out money today. The pledge criteria for accepting bonds are: AAA bonds accept 85% pledge, AA+ bonds accept 75% pledge, and AA bonds accept 65% pledge.
Zhang Xu, chief fixed income analyst of Everbright Securities, believes that in fact the People's Bank of China and the financial supervision department stand higher and look further, have more information than market participants and have a more comprehensive grasp of market dynamics. In contrast, the perspective of a single trading individual is relatively narrow, and it is easy to give a wrong perception of the market in a biased way and form unnecessary panic mood.
The volume of repurchase agreements on the Shanghai stock exchange, in which banks and other financial firms borrow money from each other using bonds as collateral, surged as borrowers sought an alternative to the over-the-counter interbank money market.Bloomberg: China’s Lehman Moment Is Drawing Closer
Traders said the lower borrowing costs on the exchange and the less stringent requirements for collateral drove smaller players to the exchange.
“Cost of borrowing on the exchange is lower,” said a trader at a Chinese bank in Shanghai.
The interbank markets were affected not just by shortages of cash but also concerns over the quality of the pledged collateral.
Traders said collateral requirements had tightened in the interbank market in the wake of regulators taking over the troubled and credit-laden Inner Mongolia-based Baoshang Bank.
Borrowers could still pledge their corporate bonds on the exchange for repos but lenders in the interbank markets had turned picky.
That means counterparty risk and solvency risk have arrived – together.
With liquidity-related stress spreading and interbank confidence waning, financial regulators are asking large brokerages to take over the role of providing financing to small and medium-size enterprises from lower-tier banks, the financial news website Caixin reported Tuesday. Big brokers have a better understanding of credit risk than obscure provincial banks in any case, the thinking goes. Securities companies have been asked to issue financial bonds eligible for use as collateral, increase quotas for short-term debt, and ease funding pressures for nonbank financial institutions.
The decision to turn to brokerages is stunning. For a start, brokers aren’t banks; they don’t have the ability to take deposits and don’t create money, so their ability to expand liquidity is far more constrained. Secondly, regulators are relying on a securities industry that only four years ago oversaw a spectacular boom and bust in China’s stock market that was fueled by excessive over-the-counter margin financing.
The original question: why did it take 20 years for the reporter to go to Guangzhou Haizhu district to carry out an interview and survey on the returned households?Property ownership certificate(Letter Investigation)
Editorial comrade:
We live in Guangzhou Haizhu District Baogang Avenue Sui Long Garden's resettlement households. At the beginning of this century, we were resettled here, but we found that the real estate had already been mortgaged and pre-sold by the developers before moving in, and could not be handled.Property ownership certificate. This has greatly affected our daily life. Over the years, we have repeatedly reflected our demands through various channels, but the problem has not been solved.
Some returned households
On May 21, the reporter drove to Baogang Avenue in Haizhu District of Guangzhou City and walked along a path. He was confronted by an 11-story high-rise building, which is what the reader called Sui Long Garden Community. Why can't the move-back households be delayed?Property ownership certificate? The reporter immediately launched an interview investigation.
Returned households reflect:
Before moving in, the real estate has been mortgaged and pre-sold for mortgage.
Suilong Garden Community and ItsPeripheral area, originally belonged to Longtian Zhijie, Baogang Avenue, Haizhu District, Guangzhou City. In 1995, with the approval of relevant departments of Guangzhou City, the plot was requisitioned for construction of commercial and residential buildings. Among them, some are developed and constructed by Guangzhou Beijing Company and some by Shengping Company. Guangzhou Beijing Company immediately set up a project company, Baoshan Company, to carry out demolition and reconstruction on the Guangzhou Beijing plot, and built an 11-storey commercial and residential building in 2000, which is the Guangzhou Long Garden residential area seen by the reporter.
Li Jiang (not his real name) is 78 years old this year. I still remember vividly the experience of moving back to China and running a license in these years and feel quite helpless. He agreed to demolish the house in October 1997 and moved into Suilong Garden Community in October 2000 according to the agreement with Suijing Company. "I stayed there for seven or eight years.Property ownership certificateNo one has been interested in this matter. We have repeatedly asked Sui Jing Company for assistance in handling the certificate, but we can't find Wu Shangping, then the head of the company. It was not until 2010 that the general office of Guangzhou municipal government forwarded the Guangzhou municipal land and resources bureau's handling of solving the problems left over from the city's history.Property ownership certificateNotice of Several Opinions on the Issue ",we began to reflect our demands to government departments and seek solutions to the problem. The result was that our relocated house was sealed up by the court due to the debt problem of Guangzhou Beijing Company. "Li Jiang said.
After judicial proceedings, the relocated house in Li Jiang was successfully unsealed in 2014. In November of that year, Li Jiang came to Guangzhou Real Estate Transaction Registration Center with great expectation and applied for handling.Property ownership certificate. However, on January 20, 2015, Li Jiang was blindsided by a "Notice of Supplementary Certificate Data" issued by Guangzhou Real Estate Transaction Registration Center. The notice stated that the relocated house in Li Jiang had been mortgaged to the business department of Guangdong Branch of Agricultural Bank of China in 1999. Only after the mortgage cancellation certificate was submitted can it be handled.Property ownership certificate.
"When I checked in, I didn't know the property was mortgaged." Li Jiang took out the receipt for the purchase of the same year and said, "His previous house was small, and when he moved back, he changed to a larger one, making up the difference of 25 square meters. Sui Jing Company obviously has mortgaged the house, why do you still charge me? " According to reports from Li Jiang, there are 28 returned households that "mortgage first and move in later".
During the interview, the reporter met Yang Yuan (pseudonym) who moved back to his home. He said that his house might be "sold two times for one room". Yang Yuan signed a relocation agreement with Sui Jing Company in January 1998, then moved into Sui Long Garden Community. In 2014, Sui Jing Company also issued a relocation certificate to Yang Yuan. Even so, Yang Yuan'sProperty ownership certificateIt has never been possible.
The mystery was solved by Yang Yuan after he inadvertently noticed a real estate sales contract dispute in Guangzhou's court system in 2018. He is very strange to the plaintiff and the defendant, but the real estate in dispute is his relocated house. What surprised Yang Yuan even more was that according to some information introduced in the second instance civil judgment of Guangzhou Intermediate People's Court, his relocated house had already been pre-sold and mortgaged by others.
Yang Yuanshun found that at least 22 households in Suilong Garden District had already been pre-sold by Baoshan Company, and the relevant buyers had already gone through mortgage formalities in the bank.
Functional response:
Developers are suspected of buying fake houses and mortgages and taking bank funds.
According to the clues provided by the relocated households, the reporter learned that in 1999, Xiao Sui Company borrowed 6.5 million yuan from the bank, and Baoshan Company, as a guarantee, mortgaged 28 properties in Sui Long Garden Community, that is, the relocated houses of Li Jiang and others to the bank. At the same time, according to the report of the returned households, the person in charge of Sui Jing Company at that time was Wu Shangping, and the person in charge of Xiao Sui Company at that time was Wu Suiyi, the son of Wu Shangping. "Guangzhou Beijing Company was a subsidiary of Guangzhou Beijing Office at that time. Baoshan Company, the project company established by Guangzhou Beijing Office, undertook the government-led demolition and renovation project. How can public interests be used to pay for private enterprises?" Li Jiang said.
Due to various factors, Guangzhou Haizhu District Court enforced the auction according to law. Zhonghui Company successfully auctioned in 2005. The auction proceeds of more than 82 million yuan were managed by the Executive Board of Guangzhou Haizhu District Court.
In this regard, some functional departments have proposed to allocate part of the money to solve the bank mortgage problem, thus helping the relocated households to run their certificates smoothly. However, Haizhu District Court clearly pointed out that the auction proceeds should be used for compensation and resettlement in priority and should be earmarked for special purposes. "It can only be used to solve the problems on the Guangzhou-Beijing plot, and cannot help other enterprises and plots to repay debts." The problem of 28 households such as Li Jiang has not been solved so far.
According to reports from Li Jiang, Yang Yuan and others, many of the "home buyers" in the relocated houses suspected of "selling one house for two" are Wu Shangping's relatives and company employees. This has been confirmed by Guangzhou's housing construction and planning departments.
Huang Chengjun, deputy director of Guangzhou's Housing and Urban-Rural Construction Bureau, said: "This problem is not limited to this building. When money is tight, some developers will use fake house purchase and mortgage to get bank funds and continue to develop with bank money. "
Huang Wenyu, deputy researcher of Guangzhou Real Estate Registration Center, said: "Most of the real estate registration was in 1998 and 1999. At that time, our information management system was not perfect. Developers were only required to register the real estate directly. At that time, they did not check the identity information of the buyers and did not check the purchase price."
Returned households reflect:
There is a dispute over the "floor covering clause" for land transfer. Developers are wrangling and the interests of returned households are affected.
In the interview and investigation, another group, 32 returned households from Shengping plot, were resettled in Suilong Garden plot on Suijing plot. Later, the two plots of land were merged into one, and were successively recovered by the government free of charge, then auctioned and auctioned by judicial auction, both of which were developed and constructed by Zhonghui Company. In the process of such changes and transfers, who should the 32 returned households claim their rights to? has become "a mess".
According to Bi Zhao (pseudonym) of the returned households, in May 1995, the Guangzhou municipal authorities approved the first phase of the Shengping plot project, involving the relocation of 75 households. Among them, 32 households chose property rights replacement and moved back to Suilong Garden Community in 2000. Since then, the Shengping plot has not been demolished. The whole plot has been identified as idle land. The Guangzhou municipal government has taken it back free of charge and listed it for sale in the municipal real estate transaction registration center.
In February 2006, Zhonghui Company successfully won the land parcel. Guangzhou Municipal Bureau of Planning and Natural Resources (known as Guangzhou Municipal Bureau of Land Resources and Housing) signed a land transfer contract with Zhonghui Company, which stated a special clause: "Under this contract, Party B shall be responsible for the compensation and resettlement of the land parcel, and the area of the land parcel to be demolished shall be about 9885 square meters. This area is the statistical data of file search, not the actual compensation and resettlement data. Party B shall be responsible for all compensation and resettlement according to the actual situation in the demolition process. " In response, Li Yuehua, a staff member of Guangzhou Planning and Natural Resources Bureau, said that this is a "bottom-covering clause" to ensure that the historical problems left over from the plot are solved.
However, different subjects have different opinions on this "bottom-covering clause", and developers are also pushing each other. According to Bi Zhao, they once looked for Shengping Company, only to find that their license had been "revoked". Looking for Sui Jing Company, the latter has always said that it should be based on the assignment contract and its special terms and conditions, and Zhonghui Company should be "responsible for all compensation and resettlement". Besides, its Sui Jing plot has been auctioned by the judiciary and should seek help from the court and the land department to solve the problem.
Since 2017, 32 relocated households have repeatedly sued Zhonghui Company, which was rejected one by one by the court, believing that Shengping Company has been resettled and "should handle the property right registration formalities for its houses". At the same time, the company also cited the scope of demolition permit in the demolition permit no 40 of 2006 as the reason that 32 relocated households were not within the "actual scope" stipulated in the special terms of the contract. On the grounds of the demolition settlement certificate issued by Guangzhou City Housing Demolition and Relocation Office in 2011, it is believed that the "settlement" proves that it is not necessary to be responsible for 32 relocated households ...
However, a judgment of Guangzhou Intermediate People's Court showed that Mo Moumou was a relocated family in Shengping plot and agreed that Shengping Company would pay the temporary relocation subsidy on a regular basis. Later Shengping Company would not pay any more. Mo so-and-so took Zhonghui Company to court and asked Zhonghui Company to continue to pay and settle the property. The court finally ruled in favor of Mo so-and-so. "Our houses were demolished by Shengping Company. Why did the verdict differ?" Bi Zhao said.
During the interview and investigation, several relocated households raised objections to the "Demolition Settlement Certificate" issued by the Guangzhou Demolition Office. At the same time, they hoped that the relevant departments would give an authoritative explanation of the "actual scope" and "full compensation and resettlement" in the special terms of the transfer contract as soon as possible, clarifying the main responsibility, "and" don't let us and the developers fall into endless verbal battles. "
Functional response:
Zhonghui Company should bear the responsibility. Its 20 houses have been restricted from sale.
With the doubts of the returned households, the reporter further verified with the relevant departments. First of all, regarding the reason why the relocated households in charge of Shengping Company will be relocated to the relocated buildings constructed by Suijing Company, the relevant responsible person of Guangzhou State-owned Land Housing Expropriation Office, Mai Huimin, gave an explanation: Shengping Company is actually a project company established by Suijing Company, and the business connection between them is normal, and the relevant departments are also informed.
It is understood that Guangzhou Municipal Planning and Natural Resources Bureau (known as Guangzhou Municipal Bureau of Land, Resources and Housing) restricted the sale of 20 units of Zhonghui Yayuan Phase I, a real estate developed by Zhonghui Company, in May 2014. In response, both Li Yuehua and Maihuimin explained in an interview with reporters that the 32 returned households did not fall within the actual scope of the assignment contract, which stated that "the area to be demolished for the plot is about 9,885 square meters". However, as long as the plot is in Shengping, Zhonghui Company should bear the responsibility according to the contract.
Since then, Zhonghui Company has submitted an administrative reconsideration to the Guangdong Provincial Housing and Construction Department, requesting to unlock 20 houses, and the appeal has been rejected. In addition, the "decision to reject the application for administrative reconsideration" issued by the Guangdong provincial housing and construction department also contains the reply opinions of Guangzhou municipal planning and natural resources bureau (known as Guangzhou municipal land and resources and planning Committee): since the land parcel has been sold twice before and after, the compensation agreement has been signed or the owners who have not handled the property rights have been resettled, which cannot be reflected in the scope of the demolition permit no 40 of 2006. Therefore, in addition to completing the compensation and resettlement of all houses within the scope of the demolition notice, the compensation and resettlement of other owners within the whole plot should also be solved.
Recent developments:
The municipal government said that the relocated households were innocent, and it was necessary to draw inferences from one instance and promote the resolution of similar problems.
During the interview, some relocated households introduced that they had reported their demands through various channels for more than 100 times, but there was still no result. "I have spent my whole life on this house, but in the end I still can't get it."Property ownership certificateMing. "
Because it cannot be done all the year round.Property ownership certificateThe daily life of the relocated households is also greatly affected: children cannot go to school nearby, traveling abroad is difficult, and even water and electricity meters cannot be installed normally. Due to the unclear property rights of the houses, the hearts of the relocated households have always been uncertain: the court system often conducts on-site investigations and claims to seal them up; The houses suspected of "selling one house for two" are often harassed and demanded to vacate.
"In any case, the relocated households are innocent and really victims." On May 29, when reporters came to Guangzhou again to exchange information with relevant leaders and departments in Guangzhou and Haizhu District, Xing Xiang, Deputy Secretary General of Guangzhou Municipal Government, said that the above-mentioned series of problems were often caused by developers taking advantage of some loopholes in the system and supervision. The next step is to try hard to solve the problems, and draw inferences from other examples to push forward the solution of a series of similar problems left over from history.
According to reports, Guangzhou municipal party Committee and municipal government attach great importance to the resettlement of sui long garden. municipal leaders in charge of the city held special meetings to organize the municipal housing construction, planning, public security, judicial administration and other departments and the municipal intermediate people's court, Haizhu district government and Haizhu district court to set up special working groups. At present, the ad hoc working group is paying close attention to checking the basic situation of the companies and real estate involved in the case, earnestly listening to the opinions of the relocated households, and sorting out and studying the solutions. Xing Xiang also made it clear that the next step would be to adopt a two-pronged approach of administration and justice. According to different situations such as seizure, mortgage, mortgage, etc., policies would be implemented in different categories and comprehensive treatment would be adopted to solve the problem as soon as possible. At present, all kinds of work are under way.
This newspaper will continue to pay attention to when the returned households can obtain the real estate certificate.
■ After editing
Effectively safeguard the interests of the masses
Dozens of relocated households have moved into new houses, but in the past 20 years, the real estate certificate has not been provided. The "sequelae" caused by the demolition and reconstruction have damaged the interests of the masses.
It should be said that the demolition and reconstruction is a good thing led by the government, improving the living environment, improving the city's appearance, the fundamental purpose is to let the masses live a better life. In order to do a good job, it is necessary to ensure that the demolition and reconstruction work is carried forward along the track of the rule of law and that the legitimate interests of the masses in the demolition and resettlement are respected and protected. For example, we should strengthen the supervision of the whole process of demolition and reconstruction, and resolutely say "no" to all acts that developers may do to harm the interests of the masses, resolutely stop them, and resolutely put an end to negligence, shielding and connivance. Another example is that once the masses' real estate disputes and interests are infringed upon, they should study and solve the problems in time and take active actions in the face of difficulties and contradictions in their work.
Adhering to the people-centered development idea, effectively protecting the interests of the masses, and solving problems for the masses are the obligatory duties and missions of the Party committee and government. I hope that the relevant local departments will have a unified understanding, form a joint force, and grasp it to the end so that these dozens of returned households can get their property certificates as soon as possible.
In addition, Bloomberg also reported that in 2013, a colleague from the former work unit gave birth to a child and invited me to accompany him to the hospital. I didn't accompany him because I was busy at work, and my nightmare started from then on. Later, I learned from the colleague that her child was Wang Zhongtan, the current director of Qingdao Banking Regulatory Bureau and then deputy director of the provincial banking regulatory bureau. The colleague got a quick promotion. Ding Haosheng, then deputy director of the Shandong Provincial Association in charge of personnel, also had this kind of male-female relationship in the system.This story is already going viral.
A real-name reporting article from internal employees pushed Jinan Agricultural Commercial Bank to the forefront.iFeng has a special report section on this story, there are currently 12 stories.
On June 8, Peng Bo, former deputy supervisor of Jinan Agricultural Commercial Bank, released an online article entitled "Real-name Report of Shandong Provincial Cadres' Misdemeanour and Loss of Bank Assets of Nearly 3 Billion Yuan" through his personal WeChat public number, pointing to many chaos in Jinan Agricultural Commercial Bank. On June 9, Jinan Agricultural and Commercial Bank's official WeChat released a message in response, saying, "Since May 24, Peng Bo has successively released information through individual websites and personal WeChat public numbers to fabricate facts and defame and maliciously slander relevant personnel."
Then, the two sides entered the second round from a distance. At noon on June 9, Peng Bo wrote again that "Jinan Agricultural Commercial Bank did not respond positively to all the problems I reported, including concealing 3 billion major cases, including the rapid promotion of leading mistresses ..." In an interview with the media on June 10, Ma Lijun, chairman of Jinan Agricultural Commercial Bank, commented on Peng Bo, saying, "By complaining, insulting and threatening, she tasted the benefits through this means. She wrote a" guarantee letter "in 2015."
On the evening of June 10, Peng Bo told surging news (www.thepaper.cn), "Ding Moumou (then deputy director of Shandong Rural Credit Union) took Ma Lijun and others with him, threatening to let me go to work, and asked me to write a guarantee that they would not talk about their problems in the future. If you don't write, you won't arrange your work. I didn't want to disturb them because I was exhausted physically and mentally. In order to get to work smoothly, I wrote a guarantee ". Later, surging news verified Peng Bo's statement to Ma Lijun, but as of press release, no response has been received.
At the same time of mutual resentment, whether the report on cadres' work style is true, whether Peng Bo's post adjustment is in compliance, and the progress of cases reported to the CBRC for more than two years ... too many mysteries remain unanswered, yet to be revealed by the official authorities.
In addition to the general information disclosure, since the time of issuing the prospectus coincided with the serious credit risk of Baoshang Bank being taken over, Guizhou Bank disclosed the risks of the relevant business of Baoshang Bank in the prospectus.Prior coverage
The prospectus specifically reminds that as of March 31, 2019, the interbank deposits of Guizhou Bank in China Merchants Bank were 1.45 billion yuan, due to the significant increase in the expected credit risk of this interbank deposit. Therefore, the Bank of Guizhou decided to confirm the impairment loss of RMB 174 million on the amount of the profit and loss and other comprehensive income in the three months ended March 31.
This adjustment led to a significant increase in the provision for impairment losses of the Bank of China and other financial institutions in the first quarter of this year from RMB 600,000 in the same period in 2018 to RMB 174.6 million. Guizhou Bank also made a risk warning saying, “We cannot guarantee that other Chinese commercial banks that deposit interbank deposits will not have significant risks such as credit deterioration.”
It is worth noting that this is the first interbank deposit receipt supported by the central bank. According to Jinzhou Bank's announcement, the inter-bank certificate of deposit is provided with credit enhancement by the private enterprise bond financing support tool (hereinafter referred to as CRMW)-if Jinzhou Bank fails to pay the full amount when the CD expires, the China Debt Credit Enhancement Investment Company will supplement the payment funds the next day.
CRMW tool is one of the "three arrows" prepared by the central bank since late October 2018 to rescue private enterprises. This tool is mainly aimed at the situation that private enterprises in the bond market have difficulty in issuing bonds, which leads to the breaking of the capital chain. Specifically, the central bank provides part of the initial funds through refinancing, and the China Debt Credit Promotion Investment Company supports private enterprises that encounter temporary difficulties in debt financing by selling credit risk mitigation tools, guarantee credit enhancement and other means (see Caixin Weekly, No.42, 2018, "Central Bank Credit Enhancement for Private Enterprises").
Due to the recent takeover of the contractor bank, the risks of some other small and medium-sized banks have aroused market concern and the issuance of certificates of deposit among peers has slowed down. In response, regulators have frequently voiced their opinions and taken measures to smooth market sentiment.
On June 10, Jinzhou Bank (00416.HK) announced the 141st issue of interbank certificates of deposit in 2019. On June 12, the bank plans to issue 2 billion yuan of inter-bank certificates of deposit (hereinafter referred to as CD) with a maturity of six months, with a rating of AAA, an issue price of about 98.42 yuan and a reference yield of 3.21%. A senior market insider told Caixin that this rate of return is the average market level.
It is worth noting that this is the first interbank deposit receipt supported by the central bank. According to Jinzhou Bank's announcement, the inter-bank certificate of deposit is provided with credit enhancement by the private enterprise bond financing support tool (hereinafter referred to as CRMW)-if Jinzhou Bank fails to pay the full amount when the CD expires, the China Debt Credit Enhancement Investment Company will supplement the payment funds the next day.
CRMW tool is one of the "three arrows" prepared by the central bank since late October 2018 to rescue private enterprises. This tool is mainly aimed at the situation that private enterprises in the bond market have difficulty in issuing bonds, which leads to the breaking of the capital chain. Specifically, the central bank provides part of the initial funds through refinancing, and the China Debt Credit Promotion Investment Company supports private enterprises that encounter temporary difficulties in debt financing by selling credit risk mitigation tools, guarantee credit enhancement and other means (see Caixin Weekly, No.42, 2018, "Central Bank Credit Enhancement for Private Enterprises").
The "June 30" liquidity test is approaching. Under the impact of the contractor bank incident, the market is concerned about whether small and medium-sized banks will suffer pains. On June 9, the official website of the central bank disclosed that the office of the financial stability development Committee had recently held a meeting to study the work of maintaining the stability of interbank business. At the meeting, the participating banks said that the scale of interbank business for other small and medium-sized banks would remain stable in the next step and the market order would be consciously maintained. At the same time, the People's Bank of China said it would use a variety of monetary policy tools to maintain a reasonable and sufficient liquidity in the financial market and provide targeted liquidity support to small and medium-sized banks.
Statistics from CICC's solid collection team show that on June 10, the actual issuance scale of interbank certificates of deposit accounted for 65% of the planned issuance scale, slightly warmer than the low point of the previous two weeks, but still lower than the 85% level before the contractor bank was taken over.
In recent days, Jinzhou Bank has been hit hard by the takeover of Baoshang Bank, resulting in difficult delivery of the annual report. At that time, financial institutions also sold Jinzhou Bank's bills.
Caixin reporter's inquiry data show that Jinzhou Bank has not issued any new CD since May 28 and has issued a CD stock of 48.61 billion yuan since 2019. According to the bank's 2019 issuance plan, the amount of CD to be issued for the whole year is 90 billion yuan, which is the highest in the interbank market.
Caixin reporters combined Jinzhou Bank's aforementioned issuance plan and previous financial reports to sort out, by the end of 2017, Jinzhou Bank had total assets of 723.4 billion yuan and total liabilities of 663.253 billion yuan. The expansion of the bank's balance sheet is driven by interbank investment and financing. On the asset side, the loan accounts for less than 30% of the total assets. The receivable investment under investment has exceeded 400 billion yuan, and the non-performing rate of this item has exceeded the non-performing rate of loans since 2016. On the debt side, the issuance of certificates of deposit by Jinzhou Bank has expanded significantly since 2016, with the amount of bonds payable reaching 30 billion yuan at the end of 2016, double the 15 billion yuan at the end of 2015. By the end of 2017, the amount of bonds payable by the bank was nearly 90 billion yuan, up 3 times from the end of 2016.
According to the aforementioned CD issuance plan of Jinzhou Bank, as of the end of 2017, the bank's non-performing rate was 1.04%, and its provision rate was 268.64%. This figure is obviously better than the average non-performing rate of 2% and the provision coverage rate of 150% in the banking industry, but the resignation of auditor Ernst & Young may indicate that there is moisture in this figure. Ernst & Young said it found that the bank's loan purpose was inconsistent with the contract.
On May 31, 2019, Jinzhou Bank announced that the board of directors and the audit committee received the resignation letter from Ernst & Young and immediately resigned as auditor of Jinzhou Bank. Prior to this, Jinzhou Bank had twice postponed the release of its 2018 annual report on April 1 and May 14. Trading of the company's shares was suspended from April 1. Later, Jinzhou Bank found a pre-listing agency to audit the annual report, which is expected to be published in August.
On the afternoon of June 9, the last day of the Dragon Boat Festival holiday, the CIRC issued its voice without naming and pointing out that "some have changed their auditors, with a large amount of tasks, and failed to complete the audit work on time." A few small and medium-sized banks fail to disclose their annual reports on time, which is a special case. These situations have been reported to the regulatory authorities according to regulations, and the regulatory authorities will urge relevant agencies to speed up the audit work and disclose the annual report as soon as possible. "
The legal representative and chairman of Jinzhou bank is now 62-year-old Zhang Wei, who has been the bank's chairman since 2008 and has not changed for 11 years. Jinzhou Bank's shareholding ratio is relatively scattered, and many major shareholders such as Dongxu Group, Tianyuan Manganese Industry, Baota Petrochemical and Huatai Motor are in poor financial condition and have many problems. Moreover, many shareholders pledged Jinzhou Bank's shares to the bank's affiliated companies or subordinate village banks. The true capital contribution is doubtful. So far, Jinzhou Finance Bureau holds less than 5%, only 4.27%. On June 2, people close to the supervision said Jinzhou local government would consider increasing capital and stabilizing the overall situation of the bank. However, so far Caixin reporter has not contacted Jinzhou Finance Bureau for verification.
Baoshang Bank was taken over and the action has just begun, but its impact on the market has gradually subsided. The bank has a large amount of funds to be controlled by the major shareholders tomorrow. occupied illegal , and it was difficult to return for a long time, which led to a serious credit crisis, which triggered the legal conditions to be taken over according to law for the first time in 20 years. This move is undoubtedly an important step in the "anti-risk" battle. This incident may have lost the sensation of news, but the reflection it brings should be long-lasting and profound. We should study how to prevent major shareholders from “looting” and explore how the regulatory authorities should deal with risk institutions in a timely manner to avoid problems.Although it isn't directly applicable in this case, my mind goes back to cartoon I saw in the late 1990s of a man in a restaurant, paying for a fake bottle of XO with counterfeit renminbi. Both are happy. As long as you take Chinese financial statements at face value, you can invest with confidence!
At the beginning of the acceptance of Baoshang Bank, some market participants expressed doubts about whether this would impact the financial market when the downward pressure on the Chinese economy increased. There were also views on the trade friction between China and the United States, and questioned the timing of takeover. improper. Now it seems that these ideas are too much to worry about. The interest rate price signal in the interbank market indicates that the market has basically returned to calm. This is due to the thorough deployment and decisive efforts of the regulators. Several consecutive "answer reporters", explaining the reasons for taking over, the follow-up treatment plan and the liquidity of small and medium-sized banks, provided sufficient expectations to the market, eased market anxiety, and at the same time, the takeover action was proceeding in an orderly manner. However, this incident reflects the common problems of financial institutions represented by small and medium-sized banks and must be given sufficient attention. The takeover may be able to cope with the moment and solve the problem. However, the supervision should be institutional and normal, in order to cope with the endless financial risks. The Baoshang Bank incident is a lesson and a warning.
The crisis of the Baoshang Bank stems from the hollowing-out by major shareholders. This is not a new phenomenon. Similar incidents have long been commonplace and are not limited to the financial sector. However, due to the uncertainty, high leverage and contagiousness of financial risks, such hollowing-out behaviors are more harmful, spread more widely and more destructive. "Tomorrow Department" and "Ampang Department" have been wiped out one after another. Their methods have long been known. They are nothing more than resorting to capital evasion, capital injection, false capital injection, and mass transfer through improper affiliate transactions, depending on the financial institution as a "cash machine". Since the majority shareholder has mastered the absolute right to speak, the internal control mechanism of financial institutions is ineffective, and financial risks are finally detonated, which has severely hit financial credit. In China, there is still a long way to go to improve corporate governance in financial institutions.
The "financial crocodile" smashed not only the internal control of this layer of window paper. The "Tomorrow Department" incident has been more than two years, but the large amount of capital exchanges between the Baoshang Bank has not been significantly affected. Data show that as of the end of September 2018, the total debt of Baoshang Bank was 503.4 billion yuan, of which 212.9 billion yuan was absorbed by various deposits, and the inter-bank liabilities (including interbank deposit certificates) were 221.1 billion yuan. In 2018, the rating of the interbank deposit receipts of the contractor bank has been negative. Is the counterparty collectively neglecting risk management or completely disregarding the potential risks? It is difficult to draw conclusions. However, the "comprehensive beliefs" firmly believed by all parties that "there will always be people who have the bottom" have undoubtedly played a role in fueling the situation. As long as the return is high, the risk can be put aside. A mature financial market can never be so strange. Breaking the industry's belief in the business, it has tried in the process of taking over the Baoshang Bank, but it may not be thorough enough for various practical reasons. The next step needs to consider the regulatory system and process, how to prevent the emergence of the Nth Baoshang Bank.If you want to promote an air of calm, do not use the term "Nth."
The Baoshang Bank incident reflects the bad ecology of financial institutions such as small and medium-sized banks. They have weak storage capacity, low internal control levels, bad growth, a large number of peers, and high costs. On the other hand, in recent years, China's financial industry has shown unprecedented prosperity. The added value of the financial services industry has been rising in proportion to the GDP, even surpassing the developed countries such as the United States and Britain. However, behind this surface prosperity is the constant pressure on the real economy. Finance is the blood of the modern economy and relies on the real economy. The development of the financial industry is inseparable from the soil of the real economy. If a large amount of money is only vacated in the financial sector, or even become a "blood machine" of the real economy, the existence of relevant financial institutions will have a big question mark. The reform of the financial supply side is to solve this structural problem. To build a multi-level, wide-coverage financial system, we must be able to effectively serve the real economy and meet social needs. At the same time, we must try our best to break down the institutional and institutional obstacles that restrict financial services. In this regard, we must make greater determination and courage.This paragraph is the essence of many China bear theses. The U.S. economy is over-financialized, debt and interest costs are choking the real economy. China has by some measures surpassed the United States in its financialization and in the velocity of its debt creation.
As mentioned earlier, there have been some doubts about the timing of taking over the contractor's bank. Regardless of the endorsement of interest, it is necessary to distinguish the deviation of knowledge. Strengthening financial supervision should not set too many preconditions, and find that violations of laws and regulations should be promptly issued, otherwise it is tantamount to connivance or even collusion. The position of supervision cannot be loosened, and there should be no extraneous factors, otherwise it will become an opportunist. Over the years, the shareholding ratio and the number of homes held by the “Tomorrow Department” have long violated relevant regulatory requirements, but they have not been corrected for a long time. It can be a unique exception, which has transmitted very harmful to the financial market. signal. It is very necessary for the central bank and the regulatory authorities to face this "historical issue" and take it out. It should become a new starting point for strengthening supervision and reshaping China's financial ecology.Calm was restored to parts of the financial market after Bear Stearns went bankrupt. It didn't last. The biggest question around the Baoshang Bank takeover was why now, why this bank? Financial problems are normally swept under the rug. Was it a warning short to others, is it really a unique case as the regulators argue, or is it a sign that accumulated losses and fraud are becoming to large to handle?
The storm of the Baoshang Bank incident has largely subsided. The person in charge of the central bank said that there is no plan to take over other institutions. We are also looking forward to this. However, the warnings issued in this case are not lost in general terms and should not be ignored. Established in 1999, Tomorrow Holdings constitutes the "wonderful situation of the 20 years in China's financial industry." Only by thoroughly disposing of the "Tomorrow Department" and its kind, and preventing the "Tomorrow System" from the system and supervision, the Chinese financial market is only Have a beautiful tomorrow.
And with the Baoshang domino now down, and the interbanking funding market suddenly freezing, Friday’s announcement will put shares of other Chinese banks under pressure, according to Sanford C. Bernstein. A Bloomberg Intelligence index of Chinese lenders dropped 0.9% on Monday to a four-month low. Predictably, ICBC, the nation’s largest lender, slipped 0.5% in Hong Kong.Is this time different? We'll soon find out. If so, it is going to be a 12 to 18 month event in financial markets.
Some tried to put a positive spin on the shocking failure: "Low quality, small regional banks are unlikely to pose systematic risks to the financial system or the operations of the big SOE and joint stock banks," said analysts Linda Sun-Mattison and Jason Li in a note on Monday. “However, the bail out of Baoshang Bank, a rare move by the government, and the involvement of CCB will no doubt heighten investor concerns over SOE banks’ risk exposure to national service."
Translation: nobody knows yet if this bank failure will result in a bank run, even as the market is clearly recoiling from the bail out. If a bank run does indeed materialize, and some of those $35 trillion in Chinese bank liabilities (i.e. deposits) flee... well, not only are all bets off, but Trump can celebrate an early victory in the US-China trade war.
The People’s Bank of China (PBOC) and China Banking and Insurance Regulatory Commission (CBIRC) have seized control of Baoshang Bank, a private lender based in inner-Mongolia due to the severe credit risk the bank poses.阿波罗新闻: 金融危机信号？包商银行因严重信用风险被接管
The China Construction Bank (CCB) has been entrusted to handle the business operations of Baoshang Bank while under state control. Principle and interest on personal savings in the bank will be fully guaranteed and business will continue to operate normally for the bank.
The takeover comes two years after Xiao Jianhua, the billionaire founder of Tomorrow Holding Group was placed under graft investigation by Chinese authorities with Baoshang Bank being identified as a key piece of Xiao’s business empire.
According to sources, the bank had helped Tomorrow Holdings to raise at least RMB 150 billion worth of funding through shadowy practices such as loans packaged as wealth management products, interbank lending that was received by the Group’s subsidiaries and funds which was obtained by the Group by pledging its stake in Baoshang Bank as collateral.
Experts: More and more financial institutions will disappear after the financial clearing阿波罗新闻: 金言：包商银行—给中国金融业报丧的银行？
For example, Zhu Zhenxin, an economist at the Financial Research Institute, wrote on May 24 that Baoshang Bank was taken over by the central bank and the China Insurance Regulatory Commission for one year due to serious credit risks. It became the first commercial bank to be taken over by the regulatory authorities in history, and it is also following 2018 2 Another financial institution after the month of the Anbon Group was taken over by the China Insurance Regulatory Commission. With the supply-side reform focus shifting from physical capacity to financial capacity in 2017, more and more non-compliant financial institutions will disappear, and Ampang and Baoshang may not be the end.
Zhu Zhenxin said that in the past decade or so, finance has run too fast, and the consequences are bubbles and risks. In terms of stocks, the scale of financial assets grew at an average annual rate of more than 15%, far exceeding the growth rate of GDP during the same period. In 2009, the growth rate of financial assets in the 4 trillion period once reached 24.1%. In 2016, China's financial assets were about 553 trillion yuan, and the ratio of GDP rose sharply to 740%. In terms of increments, the proportion of China's financial industry's added value to GDP has increased year by year since 2005, reaching 8.4% as of 2016, not only far beyond developing countries such as South Korea (2.3%) and Germany (4.1%), and even More than the traditional financial powers of the United States (7.2%) and Japan (4.4%).
He believes that the result of the expansion of the bubble must be clear. When the financial building collapsed, the upper financial bubble was cleared, and then the underlying financial capacity was degraded. It has experienced two stages since 2015. The first stage is from 2015 to 2017. The core is financial de-leverage, which squeezes out the financial asset bubble. The second phase begins in 2017, mainly due to financial de-capacity, eliminating redundant financial institutions and financial migrant workers.
From the stock market point of view, the 2015 stock market crash made it the first financial bubble to be poked. The Shanghai Composite Index fell from 5178 points to 2638 points, more than 1,000 stocks fell more than 50%, and nearly 100 stocks fell more than 70%. %. From the perspective of the bond market, the bubble broke two steps. The first step was the individual bond default in 2014, which was earlier than the stock market crash, but the real large-scale debt crisis was in the fourth quarter of 2016. Due to the tightening of the central bank's monetary policy, the 10-year bond yield rebounded from 2.6% all the way to 4.0%, a drop of 140bp. At the same time, credit defaults have become more frequent. From 2015 to 2018, there were 162 defaults in the bond market. In 2016-2017, a total of 127 bonds defaulted, including debt bonds and AA+ bonds. In 2014, only six bonds were in default.
Wu Xiaoling, the former deputy governor of the central bank, said, “The best way to eliminate risks is to expose risks and allow financial institutions to go bankrupt.” Many people may have no idea about the bankruptcy of financial institutions, especially that banks are unlikely to fail, but in fact, Whether it is a securities company, a trust company or a commercial bank, there has been a tragedy of bankruptcy.
The most famous non-bank institutions in the bankruptcy are Junan Securities and Guangguotou. In January 1999, Guangdong International Trust and Investment Co., Ltd. filed for bankruptcy due to insolvency, becoming the first bankruptcy case of non-bank financial institutions in China. At that time, it was mainly affected by the Asian financial crisis, which led to the collapse of a large wave of trust companies. The data shows that in 1997, there were 242 trust companies in China, and now there are only 68, and most of them are bankrupt or stopped.
The collapse of the Hainan Development Bank is a typical case. In the 1990s, Hainan’s real estate bubble, a number of credit cooperatives carried out business through high-interest loans, and the assets were insolvent. In 1997, 28 credit unions were merged into the sea, but the sea issue announced that they would no longer pay high interest rates. Some speculators withdrew their funds and withdrew, causing other depositors to run. They queued for withdrawals at sea distribution outlets for two consecutive months. The bad debt pressure caused by the bursting of the bubble finally overwhelmed the sea issuance. On June 21, 1998, Hainan Development Bank became the first commercial bank in China to close down due to the payment crisis.
Zhu Zhenxin wrote that when the prosperity was over, the chickens and dogs were ascended to heaven, and when the crisis was over, the waves were washed. In the past two years, physical de-capacity has brought about industrial concentration. In the next two years, financial de-capacity may also bring about an increase in the concentration of the financial industry. In fact, in the past few years, the merger of small commercial banks has emerged in the banking industry (such as the establishment of Zhongyuan Bank by 13 local banks in Henan). The futures industry has seen a wave of mergers and acquisitions. In the past ten years, the number of institutions has dropped by nearly 30, and the securities industry has also There have been cases of mergers between Shen Wan and Hong Yuan, and this situation will increase in the coming years.
On May 24, the Chinese banking industry suddenly flew out of the first black swan, and Baoshang Bank was taken over due to serious credit risks. The rare move of the central bank and the China Insurance Regulatory Commission seems to mean that the systemic financial risks that have been “still immersed in the past” have been overwhelmed by the fire; people have repeatedly shouted “wolves”, this time true. It’s coming. Therefore, there are good people who have compiled a funny advertisement based on their homonyms: “Baoshang Bank – a bank that mourns (contractors) to the Chinese financial industry!”
Financial anti-corruption has worn the pustules of the banking industry?
Baoshang Bank was established in Baotou City at the end of 1998. It is the first joint-stock commercial bank established in Inner Mongolia. It holds 36.89% of the shares of Baoshang Bank tomorrow. The founder of the Department of Tomorrow, Xiao Jianhua, is regarded as the whitest glove of Zeng Wei, the son of Zeng Qinghong, the former wealthy steward of the Jiang Zemin Group of the Communist Party of China. He is also accused of being the former daughter-in-law of the Political Bureau of the CPC Central Committee and the daughter of the central bank. There is an improper interest in Chefeng. Due to the “stock disaster” in 2015, Xiao Jianhua was brought back to the mainland by the Beijing authorities on January 27, 2017 for investigation, which led to the collapse of the pool fish, which made Baoshang Bank suffer. This is also another financial institution that has been taken over by the Anbang Insurance in the financial anti-corruption storm.
Coincidentally, on the evening of May 24, the Bank of Nanjing also issued a notice stating that the directors and presidents of the bank had submitted their resignation reports to the board of directors of the company due to the reasons for the transfer of agricultural work. This is only 5 days from the official release of Liu Shiyu's initiative on the night of May 19. This indirectly confirmed the rumors of Liu Shiyu's falling horse and Nanjing Bank.
Liu Shiyu is from Guanyun County, Lianyungang City, Jiangsu Province. He served in the central bank for a long time, and later served as the chairman of the Agricultural Bank of China. In February 2016, he took the position of the chairman of the China Securities Regulatory Commission, known as the “sitting in the crater”. In 2016, eight commercial banks were listed in the country, and his hometown of Jiangsu had five exclusive shares, and there was a blackout of interest. However, some media also said that Dai Juan, a "debt city one sister" of Nanjing Bank, who was very close to Liu Shiyu, was the fuse of Liu Shiyu's investigation. On February 15 this year, after Dai Juan and others were investigated by the Nanjing Municipal Commission for Discipline Inspection, they issued a number of illegal and illegal information, some of which pointed to Liu Shiyu.
At the beginning of the year, the Central Commission for Discipline Inspection also proposed to resolutely cut off the interest chain of the relationship between “financial crocodile” and “financial ghost”. From April 2017, former Chairman of the China Insurance Regulatory Commission Xiang Junbo was dismissed, and in May 2017, the former Chairman of the China Banking Regulatory Commission, Yang Jiacai, was investigated. In April 2018, Huarong Lai Xiaomin’s “New China Financial Corruption First Case”, and now Liu Shiyu’s initiative Investing in the case, financial anti-corruption has gradually entered a climax.
Liu Shiyu, who was "caught in the demon" and was "caught", was offended by many of the top vested interests of the CCP because of the strong supervision storm that he set up during his time at the China Securities Regulatory Commission. "I can imagine how many people will report it. In this case, Any problem with your own is precarious." It can be seen that the infighting of the CCP's privileged interest groups has reached the level of enthusiasm for your life. With the continuous deepening of the financial anti-corruption storm, more and more “financial ghosts” will be disintegrated, resulting in many banks and financial institutions being taken over.
Will the banks that have been relying on the state of the country go bankrupt?
On May 9th, the news of a “Taihang Village Bank Bank Run” in Jiaocheng County, Shanxi Province suddenly began to pass. After seeing this news, local depositors gathered in the bank to withdraw money from the day to the night. Subsequently, the president disappeared, the county magistrate rumored on the scene, and the rumors were detained.
However, there have been two real bank failures in the mainland. One was during the Asian financial crisis in 1998, because the Hainan Development Bank actually paid the depositors interest at the benchmark interest rate because of high interest rates, which led to a large-scale run-off, exhausting its deposit reserve and the country. After the rescue fund of 100 million yuan, it finally declared bankruptcy. This is also the first commercial bank in the background of the provincial government in China's financial history, which was closed for 49 years after the payment crisis. Since the deposit insurance system has not been introduced since the bank collapsed, the money of many depositors has not yet been honored, and there is no clear statement.
The other time was in 2012, the Shangcun Rural Credit Cooperative in Suning County, Hebei Province was approved for bankruptcy due to insolvency, which was also the first bank in China to officially enter the judicial process and declare bankruptcy. From the closure of the debt crisis in 2001 to the approval of the bankruptcy process in 2010, this process has allowed savers to wait for nearly a decade.
In the past, in the impression of mainlanders, bank savings deposits were the safest, and the state would never let banks go bankrupt. The poor Chinese people used to have no social pension insurance, so many people struggled to save money, and there was a meager interest income in the bank.
On May 1, 2015, the deposit insurance system was officially implemented. In 2016, Zhang Tao, the deputy governor of the central bank, spoke out: What is a stable financial order? Not every institution that protects the financial industry does not fail, and there is no risk; instead, financial institutions that have operational risks or failed operations must be allowed to go bankrupt and achieve the survival of the fittest in the market. Recently, the China Banking Regulatory Commission issued an announcement that the “Regulations on the Bankruptcy Risk Disposal of Commercial Banks” has been included in the legislative project. All this means that the myth that banks do not fall is about to become a thing of the past. Many people find that it is not absolutely reliable to deposit money into banks.
Not long ago, the China Banking Association also issued a "China Banker Survey Report (2018)", 69.3% of bankers believe that "the bank will close in the next three years." On April 2, the National Audit Office issued the audit result of No. 1 of 2019, which showed that some local financial institutions in seven provinces (regions) had high non-performing loan ratio, low provision coverage ratio, low capital adequacy ratio, and cover up. Problems such as non-performing assets.
In the past, the local joint-stock commercial banks that relied on barbaric growth and demolished the east wall to make up the Western Wall, especially in the context of the current downward pressure on the economy and the escalating trade war between the United States and China, it is very likely that there will be a run-up tide. Forced to close the door.
Will depositors' deposits be cashed after the bank closes?
If the bank goes bankrupt, who will protect the money of the people? According to the current deposit insurance system, if the bank goes bankrupt, deposits below 500,000 yuan can be paid in full. As for the more than 500,000, it depends on how much money can be left after the bank's bankruptcy liquidation. It may be possible to get it back, or it may not have one point.
In other words, the deposit insurance is subject to a limit payment, and the maximum payment limit is RMB 500,000. If the principal and interest of all the deposit accounts of the same depositor in the same bank add up to less than 500,000 yuan, the full amount shall be paid; the part exceeding 500,000 yuan shall be compensated from the liquidation property of the deposit bank. In other words, the state no longer saves deposits for depositors in commercial banks, allowing banks to go bankrupt. Once a bank goes bankrupt, depositors' deposits will be compensated by deposit insurance agencies, but compensation has a certain limit. The maximum amount of deposits for depositors in a single bank will be 500,000 yuan, and the deposit portion exceeding this limit will not be compensated.
In addition, if the bank goes bankrupt, your wealth management products at this bank, no matter how much, will not be paid in full. In the event of a loss of deposits, a loss in the principal of bank wealth management products, and a redemption crisis in bank-sending wealth management products, the bank does not accompany a penny.
So, where is the safest place for our money? The sage tells us: "Jun, minister, rich, and noble are born from morality, no virtue, no morals, and no morals." Only by getting rid of the control of communist evil spirits, seeing their lies and deceiving, no longer hold any Fantasy, while returning to traditional morality and paying attention to goodness, will receive God's blessing, richness and virtue, thus preserving the dual wealth of material and spiritual.
On February 26, the China Bankers Survey (2018) jointly issued by the China Banking Association and PricewaterhouseCoopers pointed out that more than 70% of bankers believe that real estate prices and sales will rise or remain flat.
It is learned that for the first-tier urban real estate market, 70% of bankers believe that the sales volume of the real estate market will rise or remain flat, and more than 80% believe that house prices will rise or remain flat.
For the second-tier urban real estate market, nearly 90% of bankers believe that the sales and prices of the real estate market will rise or at least remain flat; for third- and fourth-tier cities, more than 60% of bankers believe that the sales and prices of the real estate market will rise or remain flat. Compared with 2017, these two figures fell by 3.6 and 6.2 percentage points respectively.
Take the latest batch of earnings from China’s big state lenders. They show a substantial shift in lending toward the property market and away from companies. China Construction Bank this week reported residential mortgage lending rose almost 30% in the first half of this year compared with the same period last year. Meanwhile corporate lending fell 2%. At Bank of China, mortgages rose by more than a quarter.Lending into a housing bubble is risky when leverage is soaring. Recall: China Mortgage Lending Grows 32.2pc in 1H 2016, Leverage Soars
On the face of it, banks are moving away from risky lending. That helps their capital cushions because for every loan extended to a company, banks assign a 100% risk-weight. For residential mortgages, banks only have to set aside half that.
Haitong Securities says easy money, higher prices and strong sales are helping to drive credit growth, along with rising leverage. In 2011, the average ratio of new loans to sales was 17.3 percent. In 2015, this increased to 36.7 percent. In 2016, it has hit 56.5 percent, a new all-time high. At the peak of the U.S. housing bubble in 2007, this ratio was 52.6 percent.Back to the WSJ article, the outlook isn't good when mortgages are already going bad:
Lending into the property market would make more sense if the mortgage loans weren’t going bad so fast. At CCB, while mortgage nonperforming loans accounted for only 6% of total NPLs, they rose 67% on the year compared with 26% for all loans. And that’s with prices rising nationally, and rising sharply in the biggest cities.China Construction Bank and Agricultural Bank led the way with 62 percent and 64 percent of new loans going to individual residential mortgages, fThe big four banks increased their mortgage lending 56 percent overall, and already have loaned 80 percent of the 2015 full year total.
On Monday, the People's Bank of China said buyers of second homes will be required to make a minimum down payment of 40%, down from the current 60%.
It is worth noting that the recent 21st Century Business Herald reporter visited a bank in a city in Hebei, issued a number of City firms cashback solicit depositors. "1 year deposit, 10,000 yuan get 80 yuan in cash, 100,000 to 500,000 get 90 yuan, more than 500,000 deposit get 100 yuan, the scene can be removed."A city in southern Hebei firm to lobby manager of a branch of the 21st century economy reported this reporter.Reading a bank in southern Hebei, my immediate thought is Handan.
This phenomenon, city commercial retail business unit general manager, said this:. "This practice firm in the city which is not surprising, although regulators have long stopped, but repeated, but also reflects the existence of a certain rationality."
Core Tip: Behind 20 trillion land transfer audit storm, hidden local governments and developers ineffable secrets. Enterprise has been able to withstand the high land to the king, because after nearly 50 percent of the total available land returned. This not only leads to frequent the king, disguised push high prices , but also the breeding ground for huge rent-seeking space.
Behind 20 trillion land transfer audit storm, hidden local governments and developers ineffable secrets.
"Some enterprises are able to withstand the high land to the king, because after nearly 50 percent of the total available land be returned if plots involving shantytowns, premium refund amount up to more than 80 percent." Shenzhen Golden Eagle Real Estate Marketing Director Lin Xiaohua said that some companies may encounter some time to get to the restrictive barriers, including supporting hotels, large commercial, etc., the government will give financial subsidies or refund part of the land transfer.
Hunan Provincial Association of Realtors chief economist Wang Gao told the "China Times" reporter, some directed to sell the land, in essence, already locked developers, "the auction link, you can always shoot down until photographed so far, anyway, than the two sides agreed prices and spend more money, and finally the government will be returned to the developer. "
This land transfer and then return the model, not only lead to frequent the king, disguised push up prices, but also leads to a lot of places in the land auction and a mere formality, and the breeding of a huge rent-seeking space.
Private return part transfer
"I personally signed this contract, that is, before the auction, the agreement stipulates that if the auction price exceeds the contract, the Government shall own with interest returned to the developer." Housing prices listed Shenzhen Investment and Development of a department official told reporters By way of return of land transfer, reducing the cost of developers get the government to earn more investment and employment, as well as banks carrying water.
MLR data show that the national land transfer price of 129.6 billion yuan from 2001, to more than four trillion yuan last year for the first time, 13 years, an increase over 30 times, the cumulative total of nearly 20 trillion yuan.
"This land transfer 20 trillion yuan artificially high ingredient actually exists." Person of Shenzhen Investment and Development Department Housing prices listed above said.
He further said that after the transfer if it is directed, the starting price of land at public sale, often determined by the government to seek the views of developers, and specific matters relating to the transfer price of the return of a supplemental agreement entered into by the parties. Developers of the land supply, the investment cost of electricity, sewage, gas pipeline network and other municipal utilities and roads, the government returned to the developer.
"Auction of land designated by the Government shall require all into account, down the account, and then to the other on behalf of the government returned to us." The Investment and Development Department, told reporters that the mainstream approach is by doing high-level developers to pre-development costs , then the land shall be deducted, in this way for developers and government are safe.
"Early land preparation and demolition, building schools or roads to help the government, if in fact, spent 100 million yuan, you can do bigger and engineering costs as high as 500 million yuan, after the auction by the government on behalf of these infrastructure 500 million yuan returned to the developer if the land sold 1 billion yuan, 500 million yuan developers only pay the difference. "The investment and development department sources said, the return of land and there is no strict procedure, costs just get made The Government agreed to, if the program must publicity, by the Government to find a company to do the high assessment to assess the price.
Director of a listed Strategic Housing prices Yangtze River Delta region, told reporters, in some newly developed local district government in order to attract large-scale investment in housing prices, but also set up many projects, such as Green Building Award, Innovation Award and Environmental Design Award, etc. , in the form of bonuses disguised subsidies for housing prices.
"Some single award recognizes not by much, it will issue multiple awards, sometimes spiritual civilization will award all placed in the names, but there are also some projects, an award is basically to cover the cost of Kin." Housing prices above long Strategic Triangle Regional Director explained that his company in a three-city project cast, won the local government issued a Green Building Pilot multiple awards, sold per one square meter can get 1800-3000 yuan in subsidies.
Yangtze River Delta city in a financial department told reporters, because of a similar subsidy agreement requires governments and developers, but also cooperate with each other in the actual financial docking, such as housing prices need to land a one-time paid money, and the return of subsidies can be arrived land shall, therefore housing prices due to the large state-owned auditing stronger, more favored by the local government.
"If the local government simply give the land concessions, it is difficult to raise land prices, because developers in return for cost accounting and there is not much difference between the estimates, so the local housing prices need to be able to behold with an auction and behind The series of work. "Housing prices above director.
Easy formality auction
This land transfer return mode, resulting in a lot of land auction procedures mere formality.
"One time, we want to shoot long samet chihu zone, but the local government greet us and told us not to shoot, and finally by the Department of Finance, a subsidiary of state-owned enterprises competing in a zero premium." Changsha, a developer told reporters.
"When the market cooled, the government will come forward to take to prop up the state-owned enterprises, shoot high premium, in fact, down the right hand or left hand, superficial, not much really get our hands on government land revenue, earned just flowing financial bank card only . "Housing prices above Shenzhen Investment and Development Ministry sources, sometimes by the local government will take high ground, and afterwards returned to the developer's mode pulled region premium.
According to Wang high understood that this situation often occurs in a substantial land around the city, the government hopes the big developers to promote regional development, tend to land none other investment [ Introduction News ], such as a large public housing prices in Guangzhou last year in Changsha Liuyang shot of a piece of land is the "virtual shoot."
Under the current practice, the land transfer fee, paid in addition to superior financial part, entirely responsible for the use of the remaining expenditure by local government, land department has no right to intervene. Since the land transfer revenue management in a blank state law, there is no clear legal provisions, there is no corresponding constraint, always drifted away from public scrutiny. In addition to accepting some modest efforts to audit, most of the "closed operation."
Wang Gao said, the land is not included in the budget revenues, the report submitted to the National People's Congress place during the annual "two sessions", and does not include land transfer. Lack of supervision, resulting in transfer of benefits uncommon phenomenon.
"Auction will be two cases, one is taken away by other developers, the other is their win. Situation arises if the premium is too high, such as conventions 1 billion yuan, sold 2 billion yuan, maybe we do not, let other housing prices shot away, the extra one billion yuan, we divided with the government, but this happens rarely. "These investments Development Ministry sources said.
Wang told reporters that high, due to the developers before the auction only paid the deposit, the extra land premium payment is not required, simply change the contract privately again. "Anyway, how much financial fetched, and no one checked, simply press the contract money to finance."
"This approach has more than a decade, has been very common, land transfer link is a high incidence of corruption." Housing prices listed above Shenzhen Investment and Development department official said, "have gifts for officials in charge of the specific size of the project and see the amount of profit If the developers earn a million to send out for a twenty million does not matter. "
"Tight money", "your money" has been plagued by a number of much-needed financing for SMEs. Despite repeated orders to relieve the central high cost of corporate finance problems, but in practice, the right to speak weaker SMEs still have to face the "get" and "high price" two-tier financial problems.
Banks and other financial institutions to loan funds "goose plucking", leading to the real economy with money, "both expensive and difficult." This reporter recently interviewed a number of business owners, they said, now is not considering "how to live" issue, but "how to die" and whether "life after death" issue.
Then, "to borrow the cost of" how high?
Shenzhen Hirota decorative Group Finance Director 田延平 to reporters, the company's borrowing costs from last year's 6 to 6.6 percent and now suddenly rose to around 8%. "Our new addition this year is estimated to account for interest on the company's net profit last year, 10 percent, meaning that this year's cost of funds is only necessary to eat 10% of the profits."
田延平 said his company total annual funding of about 2 billion yuan, channels, including bank credit, short trading, bonds, etc., of which more than 40% of bank loans. "This year, our borrowing costs suddenly go up by 30%, the interest paid by the company for 90 million yuan last year, this year is expected at between 120 million to 150 million yuan."
"Loan rates have been floating higher, 12 percent annualized interest rate is already very common, enterprise funds a lot of pressure, I feel life more difficult this year." General manager of Zhejiang, a medium-sized clothing company, told reporters that this phenomenon is common in SMEs.
In addition to lending rates climbing, "goose plucking," the phenomenon is more widespread. Such as guarantee fees, advisory fees and all kinds of "money" are increasing the cost of loans for SMEs.
A small manufacturing business executives gave reporters just a breakdown: The company this year to apply for a bank loan of $ 8 million, "because of the way to take a mortgage loan, so let a credit guarantee company peel off 2 percent, or 160,000; when applying for credit, account manager informed me, now tight credit lines, to 8 million yuan loan, you need to give 8 million yuan of bank deposits that is, I need to start with. other channels temporarily borrow 8 million yuan in the bank, and then convert the deposit into a bank acceptances, I would pay 4.8% of the discounted fee will redeem it and then also temporary borrowing After some bargaining, and ultimately give us a 50% discount, 8 million yuan loan, deposit 4 million, discounted cost 192,000 yuan. Fortunately, the line of credit at any rate is down, the loan interest rate of 12%, the annual interest 960,000 yuan. Later, the bank told me that our financing costs have the low count. "Well afterwards, that is, small and medium enterprises in order to lend a dollar from the bank, at least to pay 0.16 yuan, or even higher.
A medium-sized building materials enterprises in Hebei total borrowing 150 million yuan, the borrowing rate 12% per year, in theory, should also interest in 18 million yuan. However, the company's chairman Yang said, "plus all kinds of commissioned intermediary costs, on average, more than 33 million yuan to repay interest annually, costs almost doubled."
Yang told reporters that the current mortgage loan financing is still based, no collateral is basically difficult loans. Therefore, the bank will generally require companies to find his security company guarantees to credit the money, frequently 2% to 5% of the guarantee fee to make the already overburdened businesses more "difficult."
Qingdao City, an annual export volume of over 20 million U.S. dollars of foreign trade business executives complained that due to small scale enterprises, to the banks for loans always make things difficult. "Our company's annual loan volume of 500 million to 600 million, will be required to pay the financial costs of a variety of names, not the same every year, it is called also .2011 called 'consultancy', probably to pay 100,000 yuan ; 2012 because of our good repayment record, only paid 50,000 yuan of 'consultancy fee', in fact, the bank did not give us any advice or consultancy services, just clever stand eyesight money only, do not pay do not give credit. 2013 we applied for a loan of 6 million yuan, but the actual arrival only 5.4 million yuan, and the remaining 600,000 yuan to buy financial forms were trapped. "the official said with exasperation.
"At present, Shanghai area small businesses and personal business loan interest rate of 18%." Bank of Communications chief economist Lian Ping said, another consignment fees, consulting fees, consultant fees, as well as 3% fee for each link, and requires the month from debt service, and ultimately the interest rate is much higher than 20%.
