The person in charge of the central bank talked about the takeover of the contractor bank: how has it been over the past week? Will any other organization be taken over?-Shanghai Metals Market

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The person in charge of the central bank talked about the takeover of the contractor bank: how has it been over the past week? Will any other organization be taken over?

Translation 07:59:31PM Jun 02, 2019 Source:Central bank
The content below was translated by Tencent automatically for reference.

SMM News: on the evening of the 2nd, the people's Bank of China published an article on the website of the people's Bank of China, "the person in charge of the people's Bank of China answered the reporter's question," to answer the question of why the contractor Bank was taken over, the progress of taking over the custody work for a week, and the liquidity of small and medium-sized banks. Recently, there have been concerns in the market about whether any other institutions will also be taken over after taking over the contractor banks, the head of the central bank said. Please rest assured that there are no such plans at present. If which institution needs liquidity support, or increase capital and shares, it can be carried out in a market-oriented way. At present, there is an overall abundance of liquidity in the financial markets and financial risks are generally controllable. We are confident that we will resolutely safeguard the stability of the financial system.

1. What is the background of taking over the contractor bank? What do you think of this takeover?

A: the major shareholder of the contractor Bank is the tomorrow Group, which altogether holds 89% of the shares of the contractor Bank. As a result of the large amount of funds of the contractor Bank being illegally occupied by the major shareholders, it is overdue and difficult to return for a long time. As a result, the contractor bank has a serious credit crisis, which triggers the legal takeover conditions to be taken over in accordance with the law.

The takeover of the contractor bank is entirely a case and we need to look at it objectively and calmly. First of all, the conditions for taking over measures are very strict. It is a very serious and prudent act to take over a commercial bank. Only when a commercial bank has a credit crisis or may have a credit crisis in Article 64 of the Commercial Bank Law, which seriously affects the interests of depositors, and Article 38 of the Banking Supervision and Administration Law may have a credit crisis, Seriously affect the legitimate rights and interests of depositors and other customers, if not taken over will seriously damage the legitimate rights and interests of the majority of customers, especially the deposit safety of depositors, will be dealt with in this way. Therefore, there is no need to take administrative takeover as a last resort. Second, the takeover of the contractor bank is carried out in strict accordance with the law. First of all, we must have a sufficient legal basis for the protection of the creditor's rights of all kinds of creditors, respect the contract and encourage the main body of the market to perform actively on the issues involved in the protection of the creditor's rights of large creditors, such as the relationship between creditor's rights and debts, acceptance of bills of exchange, margin deposits and so on. With regard to the legitimate rights and interests of creditors, the obligation to inform shall be fulfilled in accordance with the law. With regard to the signing of agreements on the acquisition and transfer of creditor's rights, they shall be negotiated on an equal footing and signed voluntarily. Claims not guaranteed in advance shall also continue to be retained, and creditors shall participate in follow-up repayment in accordance with the law. Third, the degree of creditor's rights protection to the creditors of the contractor bank is relatively high. After taking over the contractor bank this time, the deposit insurance fund and the central bank are used to undertake the acquisition, which gives full protection to all kinds of creditors of the contractor bank. The principal and interest of individual customers and customers of public and peer institutions at or below 50 million yuan are fully protected. The principal and interest of the same large creditor above 50 million yuan shall be protected in advance according to the net amount of the creditor's rights, and the average proportion of protection is expected to be about 90 per cent. The above protection standards maximize the protection of the legitimate rights and interests of all types of creditors. This time, according to the thinking of acquisition, it is in order to effectively avoid direct settlement, low degree of protection and other problems. At present, by the deposit insurance fund contribution, the central bank "lender of last resort" support in accordance with the law, the implementation of acquisitions to undertake, is a more secure way.

Recently, some people in the market are worried about whether any other institutions will also be taken over after taking over the contractor banks. Please rest assured that there is no such plan at present. If which institution needs liquidity support, or increase capital and shares, it can be carried out in a market-oriented way. At present, there is an overall abundance of liquidity in the financial markets and financial risks are generally controllable. We are confident that we will resolutely safeguard the stability of the financial system.

Second, what has been the progress of taking over the contractor bank for a week?

A: since the announcement of the takeover of custody jointly issued by the people's Bank of China and the Bank of China Insurance Regulatory Commission on 24 May, with the strong support of local governments and relevant departments, the takeover of custody has been progressing smoothly. The rights and interests of all kinds of creditors of contractor banks have been safeguarded: first, 5.2 million individual depositors and more than 200,000 personal financial customers have been fully protected; second, 25000 households with claims of 50 million or less have been fully protected against public and peer customers. Third, the acceptance of bills of exchange of 50 million yuan and less from the contractor's bank shall be fully protected, and no less than 80 per cent of the bills of exchange above 50 million yuan shall be protected. At present, the business operation of the contractor bank is normal, the business outlets are in good order, and all kinds of business are handled as usual. In fact, after the takeover, the contractor bank has been strongly protected by the people's Bank of China, the Insurance Regulatory Commission and the deposit insurance fund, and the issuance of interbank certificates of deposit on Friday has been recognized by the market. At present, the signing of agreements on the acquisition and transfer of large amounts of creditor's rights is being carried out in an orderly manner.

Third, what is the liquidity situation of small and medium-sized banks at present?

A: recently, the people's Bank of China has put in liquidity in a variety of ways, such as open market operations, central treasury cash management, and so on. The liquidity of the banking system is reasonable and abundant, and the money market interest rate at the end of May was basically the same as that at the end of last month. The market is in a stable mood. Generally speaking, the liquidity of small and medium-sized banks is relatively sufficient, and the liquidity indicators are at a normal level as a whole. From the perspective of money market transactions, the scale and proportion of financing transactions of small and medium-sized banks are stable, there is no big change, the financing interest rate is the same as the previous period, and the financing conditions are relatively loose. The people's Bank of China will continue to maintain reasonable and abundant macro liquidity, pay close attention to the liquidity situation of small and medium-sized banks, and make comprehensive use of a variety of monetary policy tools to maintain the smooth operation of the money market.

The people's Bank of China has made a comprehensive estimate and full preparation of the various factors affecting liquidity in June and will flexibly carry out reverse repo and medium-term lending facilities in the open market according to the supply and demand of market funds. The second implementation of the low reserve requirement ratio policy for small and medium-sized banks will also release about 100 billion yuan of long-term funds, effectively enriching the liquidity of small and medium-sized banks at the end of half a year.

At present, the people's Bank of China is rich in monetary policy tools, and we will make reasonable arrangements and make full use of them according to market conditions. In the process of deepening financial supply-side structural reform, the people's Bank of China will support the development of small and medium-sized banks as an important content, constantly enrich support tools, strengthen policies, and constantly improve the ability of small and medium-sized banks to serve the real economy.

Key Words:  Banks  central banks  contractor banks 

The person in charge of the central bank talked about the takeover of the contractor bank: how has it been over the past week? Will any other organization be taken over?

Translation 07:59:31PM Jun 02, 2019 Source:Central bank
The content below was translated by Tencent automatically for reference.

SMM News: on the evening of the 2nd, the people's Bank of China published an article on the website of the people's Bank of China, "the person in charge of the people's Bank of China answered the reporter's question," to answer the question of why the contractor Bank was taken over, the progress of taking over the custody work for a week, and the liquidity of small and medium-sized banks. Recently, there have been concerns in the market about whether any other institutions will also be taken over after taking over the contractor banks, the head of the central bank said. Please rest assured that there are no such plans at present. If which institution needs liquidity support, or increase capital and shares, it can be carried out in a market-oriented way. At present, there is an overall abundance of liquidity in the financial markets and financial risks are generally controllable. We are confident that we will resolutely safeguard the stability of the financial system.

1. What is the background of taking over the contractor bank? What do you think of this takeover?

A: the major shareholder of the contractor Bank is the tomorrow Group, which altogether holds 89% of the shares of the contractor Bank. As a result of the large amount of funds of the contractor Bank being illegally occupied by the major shareholders, it is overdue and difficult to return for a long time. As a result, the contractor bank has a serious credit crisis, which triggers the legal takeover conditions to be taken over in accordance with the law.

The takeover of the contractor bank is entirely a case and we need to look at it objectively and calmly. First of all, the conditions for taking over measures are very strict. It is a very serious and prudent act to take over a commercial bank. Only when a commercial bank has a credit crisis or may have a credit crisis in Article 64 of the Commercial Bank Law, which seriously affects the interests of depositors, and Article 38 of the Banking Supervision and Administration Law may have a credit crisis, Seriously affect the legitimate rights and interests of depositors and other customers, if not taken over will seriously damage the legitimate rights and interests of the majority of customers, especially the deposit safety of depositors, will be dealt with in this way. Therefore, there is no need to take administrative takeover as a last resort. Second, the takeover of the contractor bank is carried out in strict accordance with the law. First of all, we must have a sufficient legal basis for the protection of the creditor's rights of all kinds of creditors, respect the contract and encourage the main body of the market to perform actively on the issues involved in the protection of the creditor's rights of large creditors, such as the relationship between creditor's rights and debts, acceptance of bills of exchange, margin deposits and so on. With regard to the legitimate rights and interests of creditors, the obligation to inform shall be fulfilled in accordance with the law. With regard to the signing of agreements on the acquisition and transfer of creditor's rights, they shall be negotiated on an equal footing and signed voluntarily. Claims not guaranteed in advance shall also continue to be retained, and creditors shall participate in follow-up repayment in accordance with the law. Third, the degree of creditor's rights protection to the creditors of the contractor bank is relatively high. After taking over the contractor bank this time, the deposit insurance fund and the central bank are used to undertake the acquisition, which gives full protection to all kinds of creditors of the contractor bank. The principal and interest of individual customers and customers of public and peer institutions at or below 50 million yuan are fully protected. The principal and interest of the same large creditor above 50 million yuan shall be protected in advance according to the net amount of the creditor's rights, and the average proportion of protection is expected to be about 90 per cent. The above protection standards maximize the protection of the legitimate rights and interests of all types of creditors. This time, according to the thinking of acquisition, it is in order to effectively avoid direct settlement, low degree of protection and other problems. At present, by the deposit insurance fund contribution, the central bank "lender of last resort" support in accordance with the law, the implementation of acquisitions to undertake, is a more secure way.

Recently, some people in the market are worried about whether any other institutions will also be taken over after taking over the contractor banks. Please rest assured that there is no such plan at present. If which institution needs liquidity support, or increase capital and shares, it can be carried out in a market-oriented way. At present, there is an overall abundance of liquidity in the financial markets and financial risks are generally controllable. We are confident that we will resolutely safeguard the stability of the financial system.

Second, what has been the progress of taking over the contractor bank for a week?

A: since the announcement of the takeover of custody jointly issued by the people's Bank of China and the Bank of China Insurance Regulatory Commission on 24 May, with the strong support of local governments and relevant departments, the takeover of custody has been progressing smoothly. The rights and interests of all kinds of creditors of contractor banks have been safeguarded: first, 5.2 million individual depositors and more than 200,000 personal financial customers have been fully protected; second, 25000 households with claims of 50 million or less have been fully protected against public and peer customers. Third, the acceptance of bills of exchange of 50 million yuan and less from the contractor's bank shall be fully protected, and no less than 80 per cent of the bills of exchange above 50 million yuan shall be protected. At present, the business operation of the contractor bank is normal, the business outlets are in good order, and all kinds of business are handled as usual. In fact, after the takeover, the contractor bank has been strongly protected by the people's Bank of China, the Insurance Regulatory Commission and the deposit insurance fund, and the issuance of interbank certificates of deposit on Friday has been recognized by the market. At present, the signing of agreements on the acquisition and transfer of large amounts of creditor's rights is being carried out in an orderly manner.

Third, what is the liquidity situation of small and medium-sized banks at present?

A: recently, the people's Bank of China has put in liquidity in a variety of ways, such as open market operations, central treasury cash management, and so on. The liquidity of the banking system is reasonable and abundant, and the money market interest rate at the end of May was basically the same as that at the end of last month. The market is in a stable mood. Generally speaking, the liquidity of small and medium-sized banks is relatively sufficient, and the liquidity indicators are at a normal level as a whole. From the perspective of money market transactions, the scale and proportion of financing transactions of small and medium-sized banks are stable, there is no big change, the financing interest rate is the same as the previous period, and the financing conditions are relatively loose. The people's Bank of China will continue to maintain reasonable and abundant macro liquidity, pay close attention to the liquidity situation of small and medium-sized banks, and make comprehensive use of a variety of monetary policy tools to maintain the smooth operation of the money market.

The people's Bank of China has made a comprehensive estimate and full preparation of the various factors affecting liquidity in June and will flexibly carry out reverse repo and medium-term lending facilities in the open market according to the supply and demand of market funds. The second implementation of the low reserve requirement ratio policy for small and medium-sized banks will also release about 100 billion yuan of long-term funds, effectively enriching the liquidity of small and medium-sized banks at the end of half a year.

At present, the people's Bank of China is rich in monetary policy tools, and we will make reasonable arrangements and make full use of them according to market conditions. In the process of deepening financial supply-side structural reform, the people's Bank of China will support the development of small and medium-sized banks as an important content, constantly enrich support tools, strengthen policies, and constantly improve the ability of small and medium-sized banks to serve the real economy.

Key Words:  Banks  central banks  contractor banks