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Zhou Xiaochuan: Interest Rate Marketization Will Make Significant Progress In 12Th Five-Year.

2010/12/17 15:48:00 54

Zhou Xiaochuan Interest Rate Marketization "12Th Five-Year"

In December 17th, at the annual meeting of Finance and economics 2011: prediction and strategy, Zhou Xiaochuan, governor of the people's Bank of China, predicted in his keynote speech that the marketization of China's interest rate will make significant progress during the "12th Five-Year" period.

He put forward the following suggestions for the marketization of interest rates during the "12th Five-Year" period:

First of all, we must achieve fair and fair competition.

Zhou Xiaochuan said that the marketization of interest rate was generated in the market competition. It is a financial institution that is priced by competition under the condition of proper market competition.

Pricing may be biased, but competition, diversification and diversification will take part in the market. In general, the pricing will be normal.

He said that first, financial institutions with hard constraints should be selected to release their pricing power and exclude financial soft constraints to a certain extent.

Zhou Xiaochuan said, hard constraints enterprises and soft constraint enterprises compete with each other, and there will be a lot of problems.

According to the requirements of macro Prudential Management, the enterprises reaching the standard have obvious hard constraints, and the enterprises that fail to meet the standards may not have enough restraint.

The financial constraints of commercial banks and existing policy banks are different. Subsidized and non subsidized people can not compete together. The first condition is hard constraints.

In addition to hard constraints, Zhou Xiaochuan introduced the concept of "sick competition".

Specifically, in order to struggle for survival, financial institutions that have problems in crisis may have high interest rates and high price instruments to cover up the problems arising from the balance sheets and linger.

Sick competition will disrupt the normal competition order, and at the same time, there will be many unexpected phenomena in the marketization of interest rates.

Thirdly, we should further improve the pmission mechanism of monetary policy, so that the central bank's monetary policy pmission will continue to be effective in the process of interest rate liberalization.

Zhou Xiaochuan believes that the effectiveness of monetary policy should be stronger, not only in the normal economic period, but also in crisis.

Zhou Xiaochuan also suggested that the price of alternative products should be liberalized at the same time.

He analyzed that the marketization pricing of a series of financial products is linked to the marketization of interest rates.

Price has always been a system with many related things.

For example, he said, if a company's upstream products, downstream products, raw materials and substitutes, some of the prices are fixed, or highly regulated by the government, its marketization may be constrained.

"Of course, it is not necessarily done step by step, but generally speaking, in the process of interest rate marketization, a series of pricing rights of substitution products for deposit and loan must also be determined by the market."

Zhou Xiaochuan said.

While further emphasizing the pricing power of the market, it is also necessary to enhance the ability of financial institutions to enhance risk pricing. Zhou Xiaochuan said that commercial banks should be prepared to bear losses and be willing to shoulder the responsibility of risk pricing.

Financial institutions should judge the risk premium and determine the price themselves.

Zhou Xiaochuan explained that the so-called "bear losses" of commercial banks is not necessarily economic losses. If pricing is different from other institutions, it may lose customers and share losses.

From a global perspective, the focus of competition in commercial banks on financial markets is shifting from market share and customers to other more comprehensive standards.

But in China, the so-called market share is still the main indicator within the bank.

He believes that this should change.

Zhou Xiaochuan said that the interest rate marketization must be planned, taken step by step and unswervingly.

He suggested that, in the next discussion of the 12th Five-Year plan, we hope to delineate the scope and provide incentives, and push forward the marketization of interest rates under the discipline of self-discipline.

The so-called "delineation" is, "hope excellent, meet the standard, pricing ability of the behavior standard enterprise, first of all will get greater pricing power in the interest rate marketization."