According to the 21st Century Business Herald reporter combed through the interview, the content of the release of six policy signals:
Economic data turned good
Stable monetary policy will be more flexible and moderate
The Central Economic Work Conference held in December last year, the arrangement for this year is that the stable monetary policy should be flexible and moderate, to maintain a reasonable abundance of liquidity. But the sudden epidemic impact makes the macroeconomic downward pressure: the National Bureau of Statistics data show that the economic growth rate in the first quarter of -6.8%, monetary policy counter-cyclical adjustment to be increased.
Yi Gang believes that at present, China's coordinated epidemic prevention and control and economic and social development has achieved significant strategic results, the production and living order is basically back to normal, the economic data show an improving trend, the manufacturing PMI in April was 50.8, has been maintained for two consecutive months in the glory line above.
"Although the situation of the epidemic outside the country and its impact there is still a great deal of uncertainty, but the resilience of China's economy, the domestic demand market is vast, the economy continues to improve the fundamentals will not change." Yi Gang said.
Yi Gang said, the next stage, the prudent monetary policy will be more flexible and moderate, we will be in accordance with the requirements put forward in the "Government Work Report", the comprehensive use of, and innovation in a variety of monetary policy tools, to ensure that liquidity is reasonably abundant, and to maintain the growth rate of broad money M2 and the scale of social financing significantly higher than last year.
According to central bank data, the broad money M2 balance at the end of last year was 198.65 trillion yuan, an increase of 8.7 percent year-on-year, a growth rate of 0.5 and 0.6 percentage points higher than the end of last month and the same period of the previous year, respectively; the growth rate of social financing was 10.7 percent during the same period. The industry sometimes uses M2 or social financing divided by GDP to measure the macro leverage of an economy. Considering that this year's nominal GDP growth rate is lower than last year's, while the M2 and GDP growth targets are higher than last year's, the macro leverage ratio will rise in stages.
Five aspects to increase monetary policy innovation,
Improve the enterprise financing "directness"
The government work report proposed to innovate the monetary policy tools directly to the real economy, and make sure to promote the enterprise to facilitate the access to loans, and promote the interest rate to continue to go down. The market is highly concerned about the specifics of this tool.
Yi Gang explained that since the outbreak of the new Crown pneumonia, the People's Bank of China has innovated monetary policy tools, through the structuring of monetary and credit policy, precision, to shorten the chain of transmission of monetary policy, and to improve the "directness" of enterprise financing: including the establishment of a special 300 billion yuan of refinancing, increasing the refinancing and rediscounting of the dedicated amount of 1.5 trillion yuan. The company's main goal is to provide the best possible service to its customers, and to provide the best possible service to its customers," he said.
The next step is for the PBoC to increase monetary policy innovation and improve the targeting and precision of financial support:
One is to extend the policy of deferring the repayment of capital and interest on loans to small and medium-sized enterprises.
The second is to increase the credit loan support for small and medium-sized enterprises.
The third is to improve the government guarantee mechanism. Improve the magnification of policy financial guarantee institutions, expand the scale of financial guarantee, weaken the profitability assessment requirements, reduce the guarantee fee rate and counter-guarantee requirements.
Fourth, increase the bond market financing support. Guiding the net financing of corporate credit bonds increased by 1 trillion yuan over the previous year, releasing more credit resources to support small and micro-enterprises. Support financial institutions to issue 300 billion yuan of special financial bonds for small and micro enterprises in 2020, specifically for the issuance of loans to small and micro enterprises.
Credit bond financing, according to Wind data, in 2019, the net financing of corporate credit bonds (corporate bonds, corporate bonds, medium-term notes, short-term financing, PPNs) net financing scale of 2.2 trillion yuan, and this year's target of 1 trillion yuan increase means that the net financing scale will reach 3.2 trillion. This year, market interest rates are falling, bond issuance rates are also lower, increasing credit bond financing can reduce the cost of corporate financing.
According to Wind data, 204.8 billion microfinance bonds were issued in 2019, and their issuers are mainly local city commercial banks and agricultural commercial banks. The target proposed by Yi Gang has increased by 100 billion compared with last year.
Fifth, vigorously develop supply chain finance.
Financial risks focus on bank risks, the epidemic has caused some downward pressure on the quality of bank credit assets
The People's Bank of China released its Financial Stability Report (2019) last year, disclosing the timetable: 2018, while formulating the action plan for the battle, the implementation of the various work initiatives, has achieved a good start; 2019 to carry on the start, comprehensively and vertically to promote the various tasks deployment; 2020 is the final year of the war of attrition, and strive to gradually transition from the basic completion of the risk of treating the symptoms to treating the root causes, and complete the established tasks of the war of attrition.
Yi Gang believes that, on the whole, at present, the prominent risks in key areas have been disposed of in an orderly manner, the rising momentum of systemic risks has been effectively curbed, and the financial industry is generally stable and healthy development.
In all types of risks, Yi Gang focuses on banking risks. Yi said, the recent new crown pneumonia epidemic on China's economic and social development has brought unprecedented impact on the quality of bank credit assets caused by a certain downward pressure, some small and medium-sized financial institutions risk need to be concerned.2020 quarter, China's commercial banks to achieve net profit of 600 billion yuan, mainly from the banking industry asset scale expansion and management cost income ratio decline. Due to the risk exposure of non-performing loans there is a certain lag, coupled with the banking industry since the epidemic on the enterprise to defer debt service and other policies, the later banks may face a greater rise in the non-performing rate, non-performing assets increase and disposal pressure.
Specifically, in the face of the economic downturn under the impact of the epidemic, the profitability and anti-risk capacity of urban commercial banks and agribusiness banks are weaker than large banks and joint-stock banks. In the first quarter, profits of city commercial banks fell 1.2 percent year-on-year, and those of agricultural commercial banks rose only 1.9 percent year-on-year, while those of large banks and joint-stock banks rose 4.7 percent and 9.4 percent year-on-year, respectively.
In terms of capital adequacy, in the first quarter, the capital adequacy ratio of city banks rose only 0.01 percentage point year-on-year, and the capital adequacy ratio of agribusiness banks fell 0.16 percentage point year-on-year, while large banks and joint-stock banks rose 0.47 and 0.67 percentage points year-on-year, respectively.
Non-performing loan ratios of urban commercial banks and agribusiness banks rose faster. In the first quarter, the NPL ratios of city banks and agribusiness banks rose by 0.57 percentage points and 0.04 percentage points year-on-year, respectively, while joint-stock banks declined by 0.07 percentage points.
Provision coverage ratios of urban commercial banks and agribusiness banks fell faster. In the first quarter, the provision coverage ratios of city banks and agribusiness banks fell by 29.37 percentage points and 6.74 percentage points year-on-year, respectively, while joint-stock banks rose by 7.71 percentage points.
LPR reform has also played an important role in promoting the reform of the marketization of deposit interest rates
In August 2019, the central bank pushed forward the reform of the marketization of lending rates. After the reform, the LPR refers to the MLF, and the lending rate is anchored to the LPR - the central bank's policy rate can be directly transmitted to the lending rate, and a breakthrough has been made in the market-oriented reform of the lending rate. On this basis, the conversion of the stock of floating-rate loan pricing benchmarks was launched on March 1, 2020, as scheduled, and will be completed in August this year.
For the time being, the efficiency of monetary policy transmission to lending rates has increased significantly. Central bank data show that the 1-year LPR variety in April was quoted at 3.85%, down 46BP compared with the 1-year benchmark lending rate before the reform; the LPR variety with a maturity of more than 5 years was quoted at 4.65%, down 25BP compared with the pre-reform period. corporate lending rates have dropped even more, with the general lending rate standing at 5.48% in March 2020, down from the LPR pre-reform rate of July 2019 by 62BP.
Yi Gang believes that the interest rate is the most important financial factor price, and the promotion of interest rate market-oriented reform is one of the most important reforms in the financial sector, with the goal of improving the price mechanism determined mainly by the market, and steadily pushing forward the parallelism between the benchmark interest rate for deposits and loans and the market interest rate.
Yi Gang pointed out that the LPR reform has also played an important role in promoting the reform of deposit rate marketization. Lending market interest rates as a whole downward, the bank issued loans to reduce returns, in order to maintain and asset returns to match, the bank will be appropriate to reduce the cost of liabilities, high-interest rate of the power to solicit deposits and then declined. In fact, bank deposit rates have seen some changes, some banks have taken the initiative to reduce the deposit rate, market-based pricing of money market funds and other deposit products such as interest rates have also declined.
There is no timetable for when the digital RMB will be formally launched
Yi Gang introduced, at present, the digital RMB research and development work to follow the principle of steady, safe, controllable, innovative, practical, first in Shenzhen, Suzhou, Xiongnan, Chengdu, and the future Winter Olympics scenarios to carry out the internal closed pilot test in order to test the theoretical reliability, system stability, functional availability, process convenience, scenarios and risk controllability. The company is also working on a project to develop a new system that will be used in the future Winter Olympics.
He said, but the current pilot test, is still only a routine work in the research and development process, does not mean that the digital RMB is officially landed on the issue, and there is no timetable for when it will be officially launched.
Implementation of the universal small and micro credit loan support program
Yi said, increase the small and micro enterprise credit loan support. The implementation of the universal small and micro credit loan support program, through innovative monetary policy tools, to support eligible local legal person banking financial institutions to issue new universal small and micro credit loans, and support banking financial institutions to increase the proportion of credit loans.
The government work report pointed out that loans to inclusive small and micro-enterprises should be extended as much as possible, and loans to other enterprises in difficulty should be negotiated and extended. Encourage banks to substantially increase credit loans, first loans, and non-repayable loans for small and micro enterprises. Significantly expanding the coverage of governmental financing guarantees and significantly reducing rates. The growth rate of inclusive small and micro-enterprise loans of large commercial banks should be higher than 40 percent.
This target growth rate is 10 percentage points higher than last year. However, the task of inclusive small and micro loans was overfulfilled last year. Data showed that the balance of inclusive small and micro-enterprise loans of the five major banks was 2.6 trillion yuan at the end of 2019, up 53.1 percent compared with the end of the previous year.
The root cause of financing difficulties for a large number of small and micro enterprises has always been the lack of sufficient collateral. Credit loans do not require enterprises to provide full guarantees, and banks issue loans based on their understanding of the business conditions and creditworthiness of enterprises, which can help enterprises that operate in good faith to obtain financing support quickly.
At the end of the first quarter of 2020, the balance of inclusive small and micro loans amounted to 12.4 trillion yuan, of which credit loans accounted for 15.4 percent, 1.9 percentage points higher than that at the end of the previous year, and there is still plenty of room for the development of credit loan business.
The following is the full text of the interview disclosed on the central bank's website:
Reporter: The new coronary pneumonia epidemic has had a big impact on both the world and China's economy, with China's GDP falling 6.8 percent year-on-year in the first quarter. How do you see the current international and domestic economic situation?
Yi Gang: This new coronary pneumonia epidemic is the most serious global pandemic since World War II, and has affected more than 200 countries and regions around the world, with a cumulative total of more than 5.4 million confirmed cases, and is still spreading. The epidemic has had a severe impact on the global economy, with the industrial chain supply chain cycle being blocked, international trade and investment shrinking, and the number of unemployed people rising sharply. Especially in the second quarter, countries to fight the epidemic to take the "big stop" measures on the global economy will focus on the impact. The International Monetary Fund (IMF) and other international organizations believe that the second quarter of the major developed economies will suffer an unprecedented economic impact, the intensity of economic contraction is likely to exceed the 2008 global financial crisis and even the Great Depression of the last century. Global financial markets have eased after the previous huge shock, but the fundamentals continue to be severe, the risk has not been eliminated.
In the first quarter of 2020, the new Crown Pneumonia epidemic also had a major impact on China's economic and social development, with GDP down 6.8 percent year-on-year, double-digit negative growth in investment, consumption, and exports, and increased difficulties in production and operation for some enterprises, especially private and small and medium-sized micro-enterprises.
Despite the situation of the epidemic and its impact outside the country, there is still a great deal of uncertainty, but China's economic resilience, the domestic demand market is vast, and the fundamentals of a sustained economic upturn will not change.
Reporter: In order to cope with the impact of the epidemic, Europe and the United States and other major economies central banks have adopted a super-conventional quantitative easing policy. China has also taken a series of measures in financial macro-control and monetary policy, how effective is it so far? What is the basic orientation and main consideration of the next monetary policy?
Yi Gang: In order to hedge against the impact of the epidemic, the People's Bank of China, in conjunction with the Ministry of Finance, the China Banking and Insurance Regulatory Commission and other departments, quickly introduced 30 financial support policy measures on February 1, increasing the total counter-cyclical adjustment, innovative use of structural monetary policy tools, the implementation of the hedging policy since the outbreak of the epidemic amounted to a cumulative total of 5.9 trillion yuan for the epidemic control and prevention, and economic and social development to provide a strong support.
At the aggregate level, we have over-expectedly injected liquidity by reducing the quota three times, increasing the intensity of open market operations, and increasing the re-lending and re-discounting of loans, etc. We have firmly supported China's financial market to open as scheduled on February 3 after the Chinese New Year, and resolutely stabilized the confidence of the financial market.
Price-wise, we guided the open market reverse repurchase operation rate, medium-term lending facility (MLF) rate, and loan market quotation rate (LPR) downward respectively, and initiated the conversion of the pricing benchmarks for the stock of floating-rate loans to promote the reduction of interest rates on the stock of loans.
Structurally, we have applied precise measures in accordance with the epidemic situation, and actively utilized 300 billion yuan of special preferential refinancing, 1.5 trillion yuan of inclusive refinancing and rediscounting, and 600 billion yuan of new policy bank lending lines to prioritize support for the production of key medical items and living materials for the epidemic prevention and control, and small and medium-sized micro-enterprises and service enterprises that are greatly impacted by the epidemic, and so on.
In terms of policy coordination, we have strengthened the coordination of monetary policy with fiscal policy, industrial policy, and financial regulatory policy, provided financial subsidies to enterprises producing important medical and household goods for epidemic prevention and control, and extended the loan repayment period for small and medium-sized micro-enterprises, so as to help enterprises in difficulty to tide over the difficult times.
These comprehensive initiatives have already achieved significant results. In the case of most economic indicators downturn, money and credit growth against the trend. 1-4 months of RMB loans added 8.8 trillion yuan, an increase of nearly 2 trillion yuan, broad money M2 and social financing scale stock year-on-year growth rate of 11.1% and 12%, the growth rate is significantly higher than that of last year, reflecting a strong counter-cyclical regulation. Since the beginning of this year, the financing of small and medium-sized enterprises (SMEs) has increased in volume, decreased in price, and expanded in surface; at the end of April, the balance of inclusive small and medium-sized loans increased by 25.1% year-on-year, with a growth rate of 2 percentage points higher than that at the end of the previous year; the average interest rate for newly issued inclusive small and medium-sized loans in April was 5.24%, a decrease of 0.77 percentage points compared with that of the previous year; the average interest rate for new loans issued to small and medium-sized enterprises in April exceeded 28%. more than 28 million MSMEs with loan balances at financial institutions at the end of April.
In the next phase, the prudent monetary policy will be more flexible and moderate, we will follow the requirements put forward in the "Government Work Report", comprehensively utilize and innovate a variety of monetary policy tools to ensure reasonably abundant liquidity, and keep the growth rate of broad money M2 and the scale of social financing significantly higher than that of last year.
Reporter: At present, affected by the epidemic, enterprises, especially small and medium-sized micro-enterprises survival pressure highlighted. This year's "Government Work Report" proposes to innovate monetary policy tools that go directly to the real economy, strengthen financial support for stable enterprises, and do its best to help enterprises, especially small and medium-sized micro-enterprises and individual entrepreneurs, to tide over the difficulties. What are the central bank's initiatives to implement this requirement?
Yi Gang: Since the new coronary pneumonia epidemic, the People's Bank of China has earnestly implemented the decision-making and deployment of the CPC Central Committee and the State Council, innovated the monetary policy tools, and shortened the chain of transmission of monetary policy through the structuring of the monetary and credit policies, so as to improve the directness of the financing of enterprises.
One is the establishment of 300 billion yuan of special refinancing, to support financial institutions to the important medical supplies and living materials epidemic prevention enterprises to issue preferential interest rate loans, that is, to support the preservation of supply. As of May 23, 300 billion yuan of special refinancing has supported banks to more than 7,000 key enterprises cumulative issuance of preferential loans of nearly 280 billion yuan, the financial subsidies after the actual corporate financing rate of about 1.25%. Specialized refinancing is a special and quick solution to a special problem, and has played an important role in the fight against the epidemic and the preservation of supplies. Before the issuance of a strict process, the issuance of a system of accounts, after the issuance of the audit department verification of irregularities in the issuance of found together with the investigation and punishment, to ensure that the earmarked funds for the purpose.
The second is to increase the dedicated amount for refinancing and rediscounting by 1.5 trillion yuan, to increase financial support for orderly resumption of work and production, poverty alleviation, spring plowing and preparation for cultivation, livestock breeding and other areas, and to provide inclusive financing support to small and micro enterprises in the tourism and entertainment, accommodation and catering, and transportation sectors, which are greatly affected by the epidemic. As of May 21, the use of the re-lending and re-discounting dedicated quota has supported financial institutions to issue a cumulative total of 472 billion yuan of preferential interest rate loans (including discounting)****, ****supporting 570,000 enterprises (including farm households). The design of the dedicated line policy is a market-oriented financial mechanism for inclusion, taking into account the reduction of enterprise financing costs and the capital preservation operations of small and medium-sized banks, and is sustainable for both banks and enterprises.
Thirdly, the implementation of the temporary deferment of debt service and interest payment policy for loans to small and medium-sized enterprises, increasing support for enterprises, especially small and medium-sized enterprises. As of April 30, financial institutions had deferred principal and interest payments on more than 1.2 trillion yuan of MSME loans.
Next, the PBoC will conscientiously implement the requirements of the "Government Work Report", increase the innovation of monetary policy, and improve the targeting and precision of financial support:
One is to extend the policy of deferring the repayment of principal and interest on loans to small and medium-sized micro-enterprises. That is, for the end of 2020 before the maturity of the principal of the micro and medium-sized enterprise loans, the end of 2020 before the survival of the micro and medium-sized enterprise loans payable interest, debt service date can be extended to March 31, 2021 at the longest. At the same time, financial institutions are required to implement the extension of inclusive small and medium-sized loans as much as possible.
The second is to increase the credit loan support for small and micro enterprises. It has implemented a program to support credit loans for inclusive small and micro enterprises, and through innovative monetary policy tools, supported qualified local legal person banking financial institutions to issue new credit loans for inclusive small and micro enterprises, and supported banking financial institutions to increase the proportion of credit loans.
Thirdly, the governmental guarantee mechanism will be improved. Increase the magnification of policy financial guarantee institutions, expand the scale of financial guarantee, weaken the profitability assessment requirements, reduce the guarantee fee rate and counter-guarantee requirements. Encourage the local establishment of risk compensation "capital pool", used for small and micro-enterprise emergency transfer loan, government financing guarantee institutions capital supplement.
Fourth, increase the bond market financing support. Guiding the net financing of corporate credit bonds increased by 1 trillion yuan over the previous year, releasing more credit resources to support small and micro-enterprises. Support financial institutions to issue 300 billion yuan of special financial bonds for small and micro enterprises in 2020, specifically for the issuance of loans to small and micro enterprises.
Fifth, vigorously develop supply chain finance. For the resumption of work and production of core enterprises, industry leading enterprises and their core supporting enterprises, increase credit support, drive the industrial chain to resume operation. Promote timely payment regulations to speed up the landing, increase the core business accounts clearance. Play the role of accounts receivable financing service platform, and promote accounts receivable financing of 800 billion yuan by 2020 for small and medium-sized enterprises. Supervise the confirmation of rights for accounts receivable of core enterprises and promote the greater use of commercial bills of exchange with clear rights and responsibilities for accounts receivable.
Reporter: This year is the final year of the three major battles. After more than two years of governance, what results have been achieved in the battle to prevent and resolve major financial risks? Will the new crown pneumonia epidemic increase the risk of China's financial system, especially the risk of small and medium-sized banks? What are the preventive measures?
Yi Gang: Since 2018, in accordance with the decision-making and deployment of the Party Central Committee and the State Council and the specific requirements of the Financial Committee, the financial sector has taken a series of active and effective measures to prevent and resolve financial risks, and has achieved positive results. The momentum of the overly rapid rise in macro leverage has been initially curbed, the disorderly development of shadow banking has been effectively managed, key high-risk financial groups have been disposed of in a smooth and orderly manner, Internet finance and illegal fund-raising and other crowd-related financial risks have been comprehensively managed, and the construction of the system for preventing and resolving financial risks has been vigorously promoted, so that it can effectively deal with the risk of fluctuations in the financial market and external shocks. On the whole, prominent risks in key areas have been disposed of in an orderly manner, the rising momentum of systemic risks has been effectively curbed, and the financial industry is generally developing steadily and healthily.
However, the recent new crown pneumonia epidemic on China's economic and social development has brought unprecedented impact on the quality of bank credit assets caused by a certain downward pressure, some small and medium-sized financial institutions risk need to cause concern. 2020 quarter, China's commercial banks to achieve a net profit of 600 billion yuan, mainly from the expansion of the banking industry's asset scale and the decline in the ratio of management costs to income. Due to the exposure of non-performing loans risk there is a certain lag, coupled with the banking industry since the epidemic on the enterprise to defer debt service and other policies, the later banks may face a greater rise in the non-performing rate, non-performing assets increase and disposal pressure.
At the same time, if the international epidemic situation is prolonged, the increasingly serious damage to global economic growth, the turmoil in the financial markets outside the country may still spread, the impact on China's market, and to China's balance of payments and cross-border capital flows bring uncertainty.
Next, we will, on the basis of fully estimating the difficulties, risks and uncertainties, adhere to the overall work keynote of seeking progress while maintaining stability, continue to follow the basic policies and guidelines established by the central government, grasp the relationship between combating the epidemic, restoring the economy and preventing and controlling the risks, intensify counter-cyclical adjustments of the macro policies, and steadily push forward the various tasks of risk mitigation. Support banks, especially small and medium-sized banks, to replenish capital and improve governance through multiple channels, increase the disposal of non-performing loans, and enhance the soundness of financial institutions.
In the work of preventing and resolving financial risks, the PBoC will conscientiously fulfill the duties of the State Council's Financial Committee Office, strengthen the coordination of financial supervision, deal with the relationship between holding the bottom line of not incurring systemic financial risks and guarding against moral hazards, and highlight the compaction of the main responsibility of financial institutions, the local government's territorial responsibility, the supervisory responsibility of financial supervisory authorities, and the responsibility of the lender of last resort. In the event of a major financial risk, the relevant shareholders and creditors should bear the corresponding losses in accordance with the law, and the relevant institutions and personnel should be vigorously pursued for violations of the law, dereliction of duty and other acts.
Reporter: This year's Government Work Report proposes to promote the reform of market-oriented allocation of factors. What are the next considerations in the market-oriented reform of interest rates?
Yi Gang: Interest rates are the most important financial factor prices, promote the market-oriented reform of interest rates is one of the most important reforms in the financial sector, the goal is to improve the price mechanism is mainly determined by the market, and steadily promote the deposit and loan benchmark interest rates and market interest rates. The PBoC has already liberalized lending and deposit interest rates in July 2013 and October 2015, respectively, and since the PBoC initiated reforms to improve the formation mechanism of the loan market quotation rate (LPR) in August 2019, the market-oriented reform of interest rates has made further important progress:
First, the correlation between the LPR and the supply and demand of market funds has significantly strengthened. For example, the 1-year and 5-year+ LPRs released in May 2020 were 3.85% and 4.65% respectively, a cumulative decrease of 0.4 and 0.2 percentage points since the reform in August last year, fully reflecting the changes in the supply and demand of market funds.
The second is that the efficiency of monetary policy transmission has been significantly strengthened. in mid-May 2020, the percentage of newly issued loans with interest rates lower than 0.9 times the original benchmark lending rate was 35.3%, which is nearly four times the percentage before the LPR reform, and the implicit floor of lending rates has been broken.
Third, it has effectively contributed to the reduction of the actual interest rate on loans. the average interest rate on corporate loans in April was 4.81%, down 0.51 percentage points from July 2019 before LPR reform, and the decline is expected to continue in May.
Fourth, the LPR reform has also played an important role in promoting the reform of deposit rate marketization. Lending market interest rates as a whole downward, the bank issued loans to reduce returns, in order to maintain and asset returns to match, the bank will be appropriate to reduce the cost of liabilities, high-interest rate of solicitation of deposits and the power of the subsequent decline. In fact, bank deposit rates have seen some changes, some banks have taken the initiative to lower deposit rates, market-based pricing of money market funds and other types of deposit product interest rates have also declined.
Next, the PBoC will continue to deepen the LPR reform, dredge up the transmission channel from money market interest rates to lending rates, promote the reduction of the real interest rate on loans, and support the development of the real economy. At the same time, the stock of loan benchmark conversion in an orderly manner.
Reporter: In the face of changes in the external environment, in recent years, the financial sector has been firmly promoting a higher level of opening up to the outside world and promoting trade and investment liberalization and facilitation. How is the current implementation of the opening-up initiatives? Will the new crown pneumonia epidemic affect the rhythm and pace of China's opening up? What other new initiatives are there in the area of financial liberalization this year?
Yi Gang: In recent years, the financial sector has focused on announcing more than 40 domestic and foreign autonomous opening-up measures. At present, these measures have made good progress in landing, and the vast majority of measures have been landed at the legal and practical levels.
One is that the restriction on the ratio of foreign shares in the fields of banking, securities, fund management, futures and life insurance has been completely abolished, and the restriction on the qualification of foreign shareholders has been continuously relaxed.
The second is that national treatment has been given to foreign investors in areas such as corporate credit, ratings and payments; capital market connectivity has been deepened; and supporting accounting, tax and trading systems have been improved.
Third, the epidemic has not disrupted the pace of China's financial market opening. Recently, MasterCard's preparatory application to enter the bank card clearing market has been approved, Fitch has become the second international rating company to enter the Chinese market after S&P, Goldman Sachs and Morgan Stanley have realized the holding of their joint venture securities companies in China, and the access of foreign financial institutions such as BlackRock and Lubomax is being promoted in an orderly manner.
These liberalization measures are geared toward providing an open, inclusive and fully competitive financial environment, encouraging innovation to the fullest extent possible and promoting financial services for the real economy. While expanding financial liberalization, the financial sector has continued to improve macro-prudential management, strengthened risk prevention, and pushed forward the ability and intensity of financial supervision to adapt to and progress in tandem with the opening up of the financial sector to the outside world.
Next, the PBoC will continue to follow the principles of marketization, rule of law and internationalization, and actively and steadily push forward the independent opening up of the financial sector internally and externally, focusing on the following aspects:
First, it will continue to implement the financial opening-up measures announced in recent years, ensure that all measures are effectively implemented, and attract more foreign and private financial institutions to enter the Chinese market.
The second is to promote the full implementation of the pre-entry national treatment plus negative list system, set unified entry standards and promote systematic and institutionalized opening up.
Third, we will continue to improve the business environment, simplify and decentralize government, respect contracts, protect property rights, strengthen the communication mechanism for policymaking, and replace more pre-approval with post-approval supervision. Equal treatment of all types of ownership market players, and strengthening the fundamental role of the competition system.
Fourth, the expansion of opening-up will be closely coordinated with the strengthening of supervision to effectively prevent and resolve financial risks.
Reporter: China's central bank began researching legal digital currency at an early stage and has already conducted internal closed pilot tests in some cities. What is the great significance of issuing legal digital currency? How is the progress of the testing work so far? When is it expected to be officially issued?
Yi Gang: Currently, the digital economy is an increasingly important driver of global economic growth. The research and development and application of legal tender is conducive to efficiently meeting the public's demand for legal tender under the conditions of the digital economy, improving the convenience, security and anti-counterfeiting level of retail payments, and boosting the accelerated development of China's digital economy.
The People's Bank of China started the research work on legal tender digital currency earlier.In 2014, a special team was set up to begin special research on issues such as the framework for digital currency issuance, key technologies, issuance and circulation environment, and relevant international experience.In late 2017, with the approval of the PBoC, the PBoC organized some of the strong commercial banks and relevant institutions*** to work together to carry out the research and development of the digital Chinese yuan system (DC/EP).The DC/EP system was developed by the PBoC and the PBoC. EP).DC/EP has basically completed the top-level design, standardization, function development, and co-testing under the premise of adhering to two-tier operation, cash (M0) substitution, and controllable anonymity.
At present, the digital RMB R&D work follows the principles of steady, safe, controllable, innovative and practical, and first conducts internal closed pilot tests in Shenzhen, Suzhou, Xiongan, Chengdu and the future Winter Olympics scenarios in order to test the theoretical reliability, system stability, functional usability, process convenience, scenario applicability and risk controllability.
But the current pilot test, but also just the routine work in the research and development process, does not mean that the digital RMB officially landed issue, when the official launch is not yet a timetable.
Reporter: This year is the final year of building a moderately prosperous society in all aspects. What progress has the central bank made in financial support for poverty alleviation? How to continue to do a good job in the "three rural" financial services under the premise of risk control, to better help rural revitalization?
Yi Gang: In recent years, the People's Bank of China has insisted on the combination of financial poverty alleviation and financial inclusion, financial support and risk prevention, and the policy, organization, product and service system for financial poverty alleviation has been improved, and the work has achieved positive results.
Next, we will focus on the following aspects of continued efforts:
One is to grasp the implementation of financial poverty alleviation policies in detail, strengthen the use of monetary policy tools such as poverty reduction refinancing, and increase support for the "three regions and three prefectures" y impoverished areas, so as to improve the universality and accessibility of financial services in these areas.
The second is to increase financial support for industrial poverty alleviation, help impoverished areas cultivate and develop poverty-alleviating industries, promote the integrated development of financial support and industrial poverty alleviation, and increase financial support for the development of industries following relocation for poverty alleviation.
Thirdly, it promotes the sustainable development of financial poverty alleviation, strengthens the monitoring of the quality of credit assets in impoverished areas, especially microcredit for poverty alleviation, and provides timely alerts and warnings to prevent poverty from being caused by loans.
Fourth, promoting the development of inclusive finance, accelerating the construction of payment, credit and other basic service facilities in impoverished areas, strengthening the popularization and publicity of financial knowledge and the protection of financial consumers' rights and interests, and consolidating and upgrading the level of basic financial services in impoverished areas.
Fifth, to do a good job of effectively linking financial support for poverty alleviation and rural revitalization, to enhance the ability of county-level corporate financial institutions to serve rural and impoverished areas, to systematically summarize and publicize the effectiveness of financial precision poverty alleviation, to carry out research on the follow-up policy for the year 2020, and to establish a long-term mechanism for solving relative poverty.